When the tax man comes knocking, you’re probably not excited at the prospect of opening the door. But, with a few negotiation tactics in hand, you may be able get yourself out of a sticky situation and put yourself back on firm footing with the IRS. Here are 8 negotiation tips that could prove helpful when the IRS confronts you about delinquent taxes.
8 Best Negotiation Tips for Delinquent IRS Taxes:
Negotiation Tip #1: Always, Always Tell the Truth
Above all else, you must remember to tell the truth about absolutely everything. As is the case in most situations, lies have a way of coming back to bite you. If you are caught in a lie, no matter how small, you will be considered a suspect. A lie will push an investigation in a whole new direction. If you have delinquent taxes, there are ways to resolve your problems through honest negotiation. Always, always tell the truth.
Negotiation Tip #2: Speak the Language
In addition to telling the truth, make sure you use IRS lingo. Using industry-specific language makes you appear more knowledgeable to IRS agents and garners respect. You will want to use verbiage like the following:
- Penalties should be “abated,” not “removed.”
- “Currently not collectible” is the industry phrase for not being able to pay tax bills as a result of suffering financial reversals.
- The keyword “innocent spouse” signals you believe a spouse should be responsible for the tax matter at hand.
Spend some time researching IRS lingo and learn to speak their language.
Negotiation Tip #3: Keep Your Promises
Going along with the theme of truthfulness, it’s important to only make promises you can keep. When negotiating with the IRS, don’t ever make promises simply for the sake of appearing cooperative. If you can’t afford to make a $400 payment per month, don’t promise you will. It looks much better to admit you can only pay $300 than to promise a larger payment and consistently undercut what you said you would pay.
Negotiation Tip #4: Take Advantage of Payment Options
The IRS is not always the beast it’s made out to be. In fact, it usually offers friendly installment agreements and compromise to those willing to accept the rules and stipulations. The IRS’s “Fresh Start” program changed a couple of years ago to make it easier for taxpayers to qualify if they owe less than $50,000. By educating yourself on how these programs work, you can put yourself in a better position of power.
Negotiation Tip #5: Prove Responsibility
Another way to gain a stronger negotiation stance is to file tax returns before the IRS has a chance to do it themselves. If you ignore your tax returns, the IRS will eventually file them for you. The downside of this is that they often prepare these substitutes in the best interests of the government, not you. If you aren’t able to afford your tax bill, it’s important to file your most recent return so you have a chance to honestly state what you actually owe.
Negotiation Tip #6: Make an Offer They Can’t Refuse
When negotiating with the IRS, nothing beats making an offer they can’t refuse. It never hurts to make an offer. In fact, it shows you truly care about paying off your delinquent taxes and are making efforts to settle your debts.
Negotiation Tip #7: Make Your Payments
Once you develop a repayment plan, you must do everything possible to stick to your payments and not violate the prearranged terms. The IRS is doing you a favor by allowing you to repay your debts over time, but it does not take kindly to violations. The IRS can seize your property, take over bank accounts, and mortgage your home if you fail to make payments. IRS representatives don’t like surprises and will respond appropriately.
Negotiation Tip #8: Get Help
To make negotiating with the IRS easier and more effective, you will want to seek professional help. Do your research and find an honest, dependable, and experienced professional capable of helping you negotiate your current situation. When looking for a professional, be sure to read reviews and find a reputable source, not someone that makes outrageous claims. Avoid the late night infomercials promising pennies on the dollar. Instead, go with a credible U. S. Treasury Enrolled Agent, Attorney, CPA, or financial professional with extensive experience negotiating with the IRS. If one of the aforementioned professionals is also a Certified Tax Resolution Specialist, choose this route above all others.
Putting it All Together
If you have delinquent taxes and don’t know what to do or where to go, remember there is always hope. With proper negotiation skills and experienced help on your side, you can fight your way out of almost any IRS tax situation.