How Do You Beat IRS Collections at Its Own Game?

Okay so with IRS collections, here's the thing to keep in mind. IRS collections is really about what's the best end result for the client. How much can the client afford to pay? How much does the client want to pay? And what is the IRS going to come back with based on those inputs. So the easy thing about collections is you know exactly the direction it's going to go. With collections for example, you know how they're going to do financial analysis, you know the way that they're going to look at certain items of income, you know the way they're going to look at certain business expenses, so it's very easy to understand. It's very easy to take your client's circumstances or take your own circumstances and to go through and audit your financials and line them up on a financial statement and say this is what the auditor's going to look at. So anybody can really fill out a financial statement. There are some traps on that financial statement, there's probably some information you don't want to give out but at least you've got a baseline for where your financials are and where they might need to be in order to hit your desired results. The best thing that you have in the course of an IRS collections case is time, especially for the ability to control some of the inputs on your bank statements. So for example when we're negotiating an IRS collection resolution and we have a period of time that passes, we will instruct

the client to limit the amount of fun that they're having over three months. Why do we limit the amount of fun? Because I've got a revenue officer and the revenue officer is looking at the client's ability to pay and the client's going to Vegas and the client's taking vacations and the client's shopping at Nordstrom. That's going to create a problem for the revenue officer so essentially what we're trying to do is sanitize financial records that the revenue officer is going to be analyzing and making sure that everything is copasetic. We have control over that through the interactions with our clients. You get to decide when you buy something whether you put it on a debit card or whether you pay cash for it or whatever so it's not about necessarily being dishonest. Sometimes what you're doing is you're controlling the flow of information. On the financials you can control the amount you spend on food, you can control the amount you spend on fun, you can control the amounts you spend on gas and so on and so forth and the more tightly you can control these variables, the better you're going to hit your goal with IRS collections. Keep in mind as well you may not hit your goal with IRS collections, you may have to go to the appeals process, there may be multiple ways to deal with the liability but the important thing is if you look at this from a total prospective rather than just "I got a produced financial statement," you're working towards a goal. If you clearly define that goal, if you actually get that goal, you're probably going to achieve it. So that's the way to beat IRS collections at its own game 


Sam Brotman, JD, LLM, MBA

Owner and Director of Legal
Brotman Law