Negotiating with the IRS can be very frustrating for the uninitiated. Intimidating. Overwhelming. Stressful. Not the best way to feel when entering into a negotiation, much less when the party on the other side has the power of the federal government.
At Capstone Tax Consulting, Inc., we have spent the majority of our professional careers negotiating against them, never FOR them. We are not simply order takers, or translators, we are highly trained negotiators!
One thing is very clear: Negotiating with the IRS has its own set of unique, unstated rules of engagement.
Here are a few tips in case you are a DIY type:
1. Don’t rely on logic to carry the day. IRS decisions are not always made from common sense, or logic. Your way of thinking about a solution to a problem – options that would be successful in the private sector – do not apply to solving IRS problems. The IRS process is primarily governed by their own internal rules and regulations. This guidebook is called the Internal Revenue Manual (IRM), and we at Capstone Tax Consulting, Inc., know it well. The IRM contains chapter after chapter, page after page, of IRS procedures on handling most every conceivable situation – from audits to collections, and from levies and seizures, to tax court litigation. That’s the good news – there are guidelines for IRS negotiations. But it is very important to know the rules, and recognize how to apply the Internal Revenue Manual to a given situation. Success with the IRS starts with knowing what they know – getting into their playbook – the Internal Revenue Manual – and applying it to negotiations.
2. Loosening the grip is better than tightening the noose. Respect the power of the IRS. Do not underestimate it. Their hammer is most likely bigger than yours. IRS problems are best solved from a position of forward momentum and credibility. Credibility is gained from a show of respect for the process to the IRS employee you are working with, whether you like it or not. There are certainly times to take off the gloves, but that should be a very strategic, last resource approach. And this is where the Internal Revenue Manual comes into play. Knowing the IRS rules, and when they are not being applied, or not being applied properly, is a powerful tool to loosen the grip. To them it's just a job and sometimes the person you are speaking with doesn't posses the authority to even grant your requests. At Capstone Tax Consulting, Inc., we know the right amount of aggressiveness and the right moments to display it.
3. When your head is in the mouth of a lion, say "nice lion". It’s that simple. As far as Capstone Tax Consulting, Inc., our first step is creating space and time between enforcement of collection and your case. Only when we have your head free and clear of said lion's mouth, is it time to push.
4. The IRS is negotiating with monopoly money.
You are negotiating with your money – which is very real. But there is not equal risk on the IRS’s side of the table. The IRS employee on the other side is not negotiating with his own money. He has no immediate financial risk or stake. The IRS employee is just doing his job. This is neither good or bad, it just is a part of the negotiations The IRS employee may have pride, may have ego, may be very skilled in his job, but ultimately has no skin in the game. You, on the other hand, have a real financial risk. At Capstone Tax Consulting, Inc., that mindset is factored into any negotiation approach. We negotiate your case the way we would negotiate our own. Using all the knowledge, skill and expertise that our hundreds of years in combined experience allows us to deliver!
Clearly, negotiating with the IRS is unlike other negotiations. A unique set of rules (Internal Revenue Manual), practically unequaled power, and employees with no financial risk in the outcome. Knowing and applying the rules of engagement, understanding the mindset of the other side, and recognizing how to work within the IRS’s power structure is key to success. At Capstone Tax Consulting, Inc., We stand ready to assist you in this task, having a team of lethal negotiators licensed to practice before the IRS can make all the difference in the world.