The sooner competent legal counsel is retained, the better. Doing so will help save money and time. A number of situations require a tax attorney to be involved, such as fraud investigation, a lengthy audit, an audit involving legal issues, a large deficiency balance, incomplete or inadequate books and records, not filing returns for a number of years, and inability to pay.
If you filed your taxes with a professional accountant or through a tax agency such as H&R Block, it will most likely be unnecessary to retain an attorney. This is because most accountants will address the IRS audit concerns for you and resolve them. Also, if the IRS is simply requesting an update form, such as an incorrectly filed W-9, an attorney is unnecessary. All that is required is that you contact the person who made the mistake and request a correction. Finally, if the issue is a matter related to another legal issues such as a divorce or business dissolution, the attorney you already have retained can handle the matter for you.
If you have received only one notice from the IRS and see that their claim is entirely unestablished, or that it is obviously outside of the IRS’s jurisdiction to act (e.g. - a statute of limitations has expired), then first attempt to send a letter yourself to resolve the matter. When sending a letter to the IRS, always include your tax ID, case ID, and full contact information. Include a phone number where an agent can reach you if they have further questions. If the IRS responds negatively to the letter, then it is time to consider hiring a tax law attorney.