What is an IRS Revenue Officer?
Revenue officers are the senior-most collection agents at the IRS. They get assigned the cases with the highest priority within the IRS. If your case is assigned a revenue officer, it means that the IRS considers your collection matter a top priority and you should take it seriously.
I highly recommend you seek professional representation if your case is assigned a Revenue Officer. If you cannot do so, I have outlined some of the best strategies for dealing with these highly trained people.
Strategy #1 – Get Proactive with your case BEFORE the Revenue Officer gets Involved
Revenue Officers have droves of cases on their desk and their main objectives are to close out a case as soon as possible and collect as much as possible from the taxpayer in question. And other than paying as little as possible, your main objective, as a taxpayer, is to get these people out of your life as soon as possible. The best way to do that and make everyone happy is to be prepared BEFORE the RO even contacts you.
First things first, the best thing to do is to call the IRS 800 number and find out what they want. Find out what returns (if any) are missing and if they will need to be filed. Find out what financial forms you will need to fill out.
Gather any supporting documents or substantiation and get them organized (i.e., monthly expenses, mortgage or rent statements, utilities, etc.) Taking these preliminary steps shows the Revenue Officer that you are serious about resolving your tax matter
Strategy #2 – Set the tone early
Like I said before, revenue officers have so many files to get through and they want to close out a case as soon as possible. The best way to help them do that (and help yourself in the process) is to basically guide them toward what you want. And you need to establish this proactive tone early on.
This strategy is the best way to ensure you get what you want and, if done properly, leaves less up to the whims of the RO.
The best way to successfully set this proactive tone is to assess your entire situation, figure out what goals you want to achieve, devise a game plan for reaching said goals, and finally, contacting the revenue officer and letting them know what your game plan is and how things are going to go.
Be forewarned, however, the RO may not initially go for your proposed game plan. But at least you have established an opening offer and can negotiate from there.
Alternatively, if your debts are about to expire, your best bet is to wait out the statute of limitations on them and NOT initiate contact with your revenue officer and just wait for them to come to you. Believe it or not this strategy does work from time to time.
Strategy #3 – Get on the RO’s good side.
The Revenue Officer has the upper hand, and you need to remember that fact and make things easier for them. This will go a long way toward getting and staying on their good side and ensuring you get a favorable outcome.
If they ask for additional documents, give them to them in a timely manner. If they set up a deadline for something, try and submit what is asked of you before said deadline. When you do submit documents make sure they are organized and clearly labeled.
The best way to do this is to make cover pages for everything or to attach sticky labels to documents letting the RO know what they are. If you are faxing something, make sure it is not voluminous. If what they are asking you to fax involves a lot of pages, inform them of that and ask them if they would prefer you mailed them in an organized fashion. They will be grateful for this.
These people hold your financial fate in their hands. Don’t mess with that. Show them the utmost respect and cooperation. Remember, you catch a lot more flies with honey than with vinegar. It would make it hard (and highly unlikely) for an RO to place a lien or levy on someone who is nothing but pleasant, cooperative and compliant. But get on their bad side and with a flick of their pen you may find that a lien or levy has been placed on your account. Then you’ll have an even bigger problem to deal with than before. You don’t want that.
Strategy #4 – Follow Up
This is another way for you to be proactive in your case. Remember, IRS Revenue Officers can have up to fifty current cases at any given time. Your case is not always going to be their top priority. And they may take a while to get back to you. In fact, this is almost a guarantee. So, make sure you politely and diligently stay in touch with them to get updates, make sure they receive your documents, etc.
It can be frustrating waiting to hear back from your RO but don’t ever show that or take it out on them. Chances are (and from my experience), if you are nice and polite in your efforts to get in touch with them, when they finally DO get back to you, they will be apologetic.
Whatever excuse they give you for taking so long to be in touch, just tell them it’s no big deal and dismiss it. This shifts the power dynamic a little bit and makes them feel bad and they may feel indebted to you in some way.
Be sure, however, to document the date of each call and what was discussed. Just in case you need it later.
Strategy #5 – Manage your Expectations
If you have a large tax liability (which you probably do if there is an RO assigned to your case) don’t expect a favorable resolution while still getting to keep your beach house or taking that luxury vacation every year.
These people’s main goal is to get as much money out of you as possible without causing financial hardship. And while they understand that everyone has certain living expenses that must also be met, know that their “allowable living expenses” don’t include things like a luxury car, investment properties, gym memberships, vacations, dining out expenses, your children’s private school tuition, etc.
If they find that they can collect more from you by having you give up some of these luxuries, you probably will have to say bye-bye to them. They only allow the bare minimum required for meeting your basic living expenses. You can’t have your cake and eat it too.
Sometimes, there are ways around this but for that you will probably need the help of a professional, like a tax attorney who knows the ins and outs of all this and is familiar with what corners can be cut and what exceptions can be made (and when). But, if you were living a luxurious life with a ton of extra amenities, know that you will have to give some (or all) of those extras up. The IRS typically gives taxpayers about a year to rid themselves of these expenses.
Basically, the point here is to manage your expectations. Just because there is a way to settle with the IRS doesn’t mean you won’t have to make some tough sacrifices in order to reach said settlement. The other alternative, of course, is to pay off your debt in full. Then you won’t have to give anything up. But chances are, if you are reading this, that is not an option for you.
Strategy #6 – Know when to get tough
There is a reason most people in these situations hire professional help. Sometimes it can be hard to tell whether a RO is being difficult or just doing their job. Because the fact of the matter is, there are some that will try to walk all over you, go on fishing expeditions for a ridiculous number of documents to substantiate your financial statement or even try to intimidate you and pressure you into paying more than you are comfortable or able to pay.
As I have mentioned before, it is important that you remain pleasant and polite with your RO but if you feel they are overstepping, they may need to be put in check.
Before you go about doing this, you need to take a beat and think about what they are asking of you and why it is unreasonable. Do some research on the matter, consult the IRM, etc. Knowledge is power after all. Upon doing the necessary research, if you find that they are, in fact out of line or going beyond the scope of their position, don’t be afraid to politely but firmly say so.
Cite the IRM if possible. Chances are they will back down if you do this. If they still don’t, speak to their manager. Although, this should be a last resort. The last thing you want to do is to get them in trouble with their boss and alienate or upset them.
I hope these tips were helpful in dealing with revenue officers. Like I said before, if possible, retain some professional help or representation if you find that you are in hot water with the IRS. But if not, these are some of the best professional tips I have accumulated throughout my career in dealing with the IRS and revenue officers.
If you decide you want to retain a professional for your matter, contact Ayar Law. We know the ins and outs of tax law and tax law is all we do. So pick up the phone and call us today for free, no obligation legal advice about your mater 800.571-7175. We look forward to hearing from you.