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IRS Woes Require Professional Attention

The father of actress Michelle Williams called in the professionals to deal with his ongoing fight against the IRS.  Larry Williams will use the same team of tax lawyers that successfully helped Wesley Snipes take on Uncle Sam just a few weeks ago. 


Williams, 64, hired attorneys Robert Bernhoft and Robert Barnes to defend him on three counts of attempted tax evasion. "He's eager to restore his good name and reputation," Bernhoft told The New York Post (NWS).  The stock market trader is accused of willfully attempting to evade $1.5 million in taxes from 1990 to 2001. In May 2006 he was arrested by law enforcement in Sydney, Australia on behalf of the United States.  He was later set free on $753,000 bail but awaits possible extradition.  
The IRS is after Michelle Williams' father for back taxes.



As Williams knows all too well, it is important to get the right tax assistance when dealing with the IRS and do it in a timely manor. Jane Bergner, a tax attorney from Washington, D.C., says, “If you need professional assistance, get it sooner rather than later. Don’t save it until the last minute.”


According to Tom Ochsenschlager, vice president of taxation at the American Institute of Certified Public Accountants, people only need one good tax professional to help file a return. However, Ochsenschlager says, it is important to shop around until you find some who makes you feel comfortable. “It is a very personal relationship that you will have.  Tax preparers know more about you than your minister does.”  


Some people turn to tax preparation chains or computer programs to help get their claims in order during tax season. Ochsenschlager says that this is acceptable only if the returns are fairly simple, because the training and experience of these types of preparers is not regulated.  If there is any complexity to the return it may make more sense to turn to a certified public accountant.


Certified public accountants are more qualified to give financial and tax advice and can often guide their clients through both simple and complex tax returns.  Ochsenschlager suggests using a CPA especially if a person recently underwent a significant lifestyle change, such as a divorce or retirement.  


It is also important to note the major difference between a regular accountant and a CPA. Anyone who does bookkeeping can be called an accountant, but a CPA is licensed by the state. They are also required to have completed 150 hours of college course credit, to pass an exam which covers business, auditing and general accounting rules, to follow a strict ethical code, and to take 80 hours of continuing education every two years. 


While a CPA prepares tax returns and is qualified to represent a client before the IRS, only a tax attorney can defend their client in tax court. So, while they do not handle the preparation of actual returns, tax attorneys are certainly the correct choice for any situation that may involve legal implications.  Dewey Watson, a tax attorney, says, “If you know that you have done something wrong [with your taxes].  Call a tax attorney immediately.”


The cost to hire any of these tax professionals will vary greatly depending on the complexity of each case, how well organized a client is, and what state the professional is located in.  But, the results may be well worth the money spent.  “There is a tremendous advantage to having the same person do your returns year in and year out.  They get to know you,” says Ochsenschlager. “When people do their own they can make mistakes; I do believe that in my career I’ve kept a fair number of people out of jail.”

 

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Although your chance of being audited by the IRS is still a mere 0.8%, you should know how to avoid and prepare for an audit should you be one of the unlucky few.

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