Sometimes both parties agree to disagree, but it can be possible for the parties to come up with a contingency agreement to memorialize perspectives and set up the parties for success in the future. This commentary addresses this type of situation. This may essentially be a bet on the future that both parties can live with going forward.
How about the IRS?
In an experiment by neuroscientists participants were given $10 dollars and were told they needed to share the amount with another party. If the other party accepted the offer they could keep the difference. This resulted in some interesting findings that were found to tie directly into negotiations. The commentary that follows could be used in any negotiation including those with the IRS and in other venues where one party seems to have an upper hand.
Today the focus is on the IRS, business valuation and how to overcome differences of opinions with the IRS. Although our society reinforces confrontation, winning and overpowering the other side, I am offering a way to reduce stress, save time, save money and work to resolve issues with the IRS. This method does not always work, but in my experience it works nearly all the time. As such consider the approach offered as a way to resolve your business valuation issue with the IRS. I also ways to proceed should the recommended approach not work.
When working with the IRS recall that one of your rights in the IRS Taxpayer Bill of Rights (#10) is for the system to be just and fair. This article discusses this issue related to a recent business valuation case to resolve an issue. Stay positive, remain professional, focus on the facts related to the issue, listen to understand the IRS representative's perspective and work to resolve the issue.
Before beginning or even entertaining a negotiation, thought should be given to understanding the other party, a social media search, building a relationship, listening to the other party and educating the other party. These are all elements that are needed before beginning the actual process of negotiating to enhance the chances of success.
Reading an article from the Harvard Law School Program on Negotiations entitled “Four Strategies for Making Concessions”, I thought of three recent cases where I have coached clients related to issues associated with IRS audits and thought I would share insights with you related to this article. The authors suggest: