It’s no joke: Being nice is among this attorney’s top ways to deal with the IRS

Tax controversy attorney Melissa Wiley has long had three top ways of dealing with the IRS. One is knowing the Internal Revenue Manual (IRM), which contains internal guidelines for IRS personnel to follow, and another is taking advantage of any self-service options on the IRS website.

And the third one? “It’s going to sound like a joke, but it’s not,” Wiley, a partner at Kostelanetz LLP, said at an AICPA & CIMA ENGAGE 25 session on dealing with the IRS. “Be nice. Be really nice. Imagine the job that is, you sitting on the other end of a phone line in Ogden or Philadelphia or Cincinnati, and you’re working for the IRS. It is a hard job. People are not nice to those people.”

With the staffing and budget cuts reducing the overall number of IRS employees between 20% and 25% and leaving newer employees to take questions as more experienced workers resigned, the job hasn’t gotten easier.

“So let that sink in for a minute,” Wiley said. “If you think it’s hard to get resolved with the IRS right now, at its current level of funding and staffing, all of that is going to go down by at least 20, 25%, if not more.”

Wiley, a tax controversy attorney for 22 years, recently spoke with someone at the IRS who said the average amount of experience on their team was 25 years before staffing cuts. Now, the average is 11 years, she said in an interview with the JofA. “So being able to say, ‘Look, I think you can get me what I need if you go to this part of the IRM,’ … you’re just kind of helping folks out to get to the right answer because so many of the people at the IRS want to do the right thing,” Wiley said. “They’re not out to make our lives miserable.”

It’s important to know the IRM not only because you can help IRS employees but also because that knowledge can help your client, she said.

For example, the IRM is the only place where first-time abatements (FTAs) are mentioned. Wiley describes FTAs as “a bit of administrative grace” for clients who meet certain requirements, including having no unreversed penalties in the preceding three tax years, except estimated tax penalties. They’re neither statutory nor regulatory, so a CPA or attorney calling the IRS on behalf of a client must know they’re in the IRM. And FTAs only apply to penalties imposed under Code Secs. 6651, 6698, 6699, and 6656, which deal with failure to file, failure to pay, and failure to deposit on a timely basis.

“This is a get-out-of-jail-free card that you can use once every three years,” Wiley said. “Essentially, you have to have three years of good history, no penalties before it happens again, then you can use your get-out-of-jail-free card again.”

Wiley will combine her “be nice” and know the IRM way of doing business when she quotes verbatim from the IRM in letters to the IRS.

“If you remember nothing else from any of this presentation, making it easy for the IRS employees to give you what you want is step number one,” she said. “If I can show them, in their internal handbook, why they have to do what I want, they’re like, great. If they have to go looking for it, if they have to think about it, it’s more likely to be done wrong, and it’s more likely that someone’s going to say, like, ‘above my pay grade.'”

Online options such as the document upload tool, secure messaging, and Tax Pro Account will become more important as it becomes more difficult to reach people on the phone, she said.

But sometimes, the IRS systems can beat you down, even someone as savvy as Wiley.

“Anybody use TDS (transcript delivery service)?” she asked the ENGAGE crowd. “It’s great when it works. It’s amazing because you can actually get things very quickly and have it online in that repository. If you can access TDS, I highly recommend it.

“I keep saying that because I can’t. I have tried to sign up for TDS like 15 times, and they keep telling me that I can’t validate myself. And then they tell me that they’re going to send me in the mail a PIN [personal identification number] that I have to go in in three weeks and tell them what it is. And then I don’t get that mail, or, if I do, I get it in four weeks and it’s expired, and I have to do it all over again. I’ve tried for years to get into TDS, and the only reason I know it’s great is because my associates have it.”

— To comment on this article or to suggest an idea for another article, contact Martha Waggoner at Martha.Waggoner@aicpa-cima.com.