“Tax controversies” refers to cases in which we interact with Internal Revenue Service employees. We represent taxpayers administratively before the Internal Revenue Service or its Appeals Office, and in courts of the United States.
We treat IRS employees with respect. It is in our clients’ best interests that we do so. We have heard from more than one IRS employee, “You catch more flies with honey than with vinegar.” Our clients are good people. They want representatives who reflect their values.
We love technical tax issues, the more complex the better. We apply our knowledge of tax law and accounting to find “out of the box” solutions to our clients’ tax problems. We exercise sound judgment in guiding our clients to the best results possible to their tax problems.
Tax Assessment Cases
If an assessment of tax against our client is incorrect, we have an amended income tax return prepared for the client and file it to correct the assessment. We represent our clients in audits of their tax returns. If we are unable to reach a satisfactory resolution of our client’s case with IRS Examination Division personnel, we take the case to the IRS Appeals Office. Most cases can be satisfactorily resolved in the IRS Appeals Office. If a case cannot be satisfactorily resolved in the IRS Appeals Office, we docket it in the U.S. Tax Court, giving us an opportunity to negotiate a settlement of the case with IRS counsel.
Tax Collection Cases
In a tax collection case, we take powers of attorney from the client, and file them with the IRS. If the IRS is levying the taxpayer’s financial accounts or wages, we have the levy released. And in any event we have a hold placed on IRS collection action against the client.
We pull the client’s IRS account transcripts. We review the client’s federal tax account transcripts, to familiarize ourselves with the accounts, and to identify suspect assessments of tax or penalties. If we find suspect assessments, we advise the client of same and, if the client authorizes us to seek abatement of the assessments, we do so.
Once we are satisfied that the federal tax assessments against the client are correct, we seek to enter the client into an installment agreement with the IRS requiring the least possible monthly payment. If the client is unable to pay anything to the IRS at the present time, we have the client’s tax accounts posted as currently not collectible (“CNC”). When a client’s accounts are posted as CNC, the IRS refrains from collection action concerning the accounts, and the 10-year collection statute of limitations continues running on the accounts.
An offer in compromise (“OIC”) is rarely in the client’s best interests. The IRS rarely accepts an OIC. The 10-year collection statute of limitations is suspended during the pendency of an OIC. If a client’s OIC is rejected, as is likely, the client is out the fees spent to make the offer.
If a client is a candidate for a successful offer, and authorizes us to make an offer for him or her, we will put our all into the offer.
Bankruptcy is almost never advisable in dealing with tax collection action. Many taxes are nondischargeable in bankruptcy. Even where taxes are dischargeable, prepetition tax liens in the client’s property continue postpetition. Most clients are well advised to avoid the scrutiny of a bankruptcy trustee. The client is out the fees incurred to file an ineffective (or worse) bankruptcy case.
IRS Appeals Office
If we are unable to resolve a case before the IRS Examination Division or Collection Division, we take it to the IRS Appeals Office. The Appeals Office is an independent, quasi-judicial office within the IRS. Appeals officers (now called “settlement officers”) consider litigation risks, and have broad discretion to settle cases. We get great results for our clients in the IRS Appeals Office.
In the rare case which cannot be satisfactorily resolved in the IRS Appeals Office, docketing the case in the United States Tax Court gives us an opportunity to negotiate a settlement of the case with IRS counsel. If we are brought into a case after the notice of deficiency has issued, and the case has not yet been to the IRS Appeals Office, docketing the case in the U.S. Tax Court provides us an opportunity to present the case to the IRS Appeals Office, as docketed cases are automatically sent to the IRS Appeals Office to attempt settlement, if they have not yet been to the Appeals Office.
It is also possible to litigate tax refund cases in United States District Court or the United States Court of Federal Claims.
We have well-honed litigation skills. However, litigating a case to judgment is prohibitively expensive for most clients.