Many of our clients, especially those that are facing an IRS audit, are rightly concerned that the IRS will look at them more suspiciously and/or treat them worse if representation is used. i.e. a tax lawyer. Specifically the fear is that the IRS will think a crime is being hidden or committed. My response to this question is usually given in three parts:
1. Lack of experienced representation often results in missed opportunities and mistakes.
The IRS won't tell you about your rights, the planning you can do, and the arguments you missed. Many taxpayers end up paying thousands of dollars more than they would have in the end, had they hired experienced counsel.
I have represented many clients who came to me after trying to do it themselves. They realized that the IRS simply let them disclose the information and told them what to do.
The audit was finalized with incorrect debt amounts, appeal dates were missed, offers in compromise were filed incorrectly, payment plans were too high, bankruptcies were filed without proper preparation and the tax debt remained at the end. I could go on.
If proper representation will increase the odds that a real, long term solution is found, who cares what the IRS thinks?
2. The IRS can't care
You are entitled to a defense. You are entitled to hire someone to help you deal with what can be a confusing labrynth of rules and dates. Our system of laws doesn't assume guilt as a result of taking advantage of these rights.
3. The IRS wants to impose the simplest solution
The simplest solution is just to disclose what is requested and accept the IRS audit determination or calculation of your budget. Long term, this is most often a recipe for failure.
Sometimes, IRS officers will tell a taxpayer that they don't need representation in an effort to do the above i.e. get their way. I assume that this statement is made after the taxpayer has indicated they want to consult with a lawyer or other representative.
If so, the officer or agent is likely breaking the law. The IRS must stop the interview if the taxpayer indicates a desire to consult with counsel.