Understanding Tax Law
Tax law governs the assessment and collection of taxes at federal, state, and local levels. It includes income tax, estate tax, business tax, and various other levies. Tax attorneys help with IRS disputes, audits, collection issues, criminal tax matters, and strategic tax planning.
Common Tax Problems
IRS Audits
Examination of tax returns. Types include correspondence, office, and field audits. Rights include representation, appeal, and burden of proof on IRS for penalties.
Tax Debt
Unpaid taxes with penalties and interest. Options include installment agreements, offers in compromise, currently not collectible status, and bankruptcy.
Tax Liens & Levies
IRS collection actions. Liens attach to property, levies seize assets. Can negotiate release, withdrawal, or subordination.
Unfiled Returns
Failure to file can result in penalties, substitute returns by IRS, and criminal charges. Voluntary disclosure programs available.
Payroll Tax Issues
Trust fund penalties for unpaid employee withholdings. Personal liability for responsible persons. Serious consequences.
Criminal Tax Cases
Tax evasion, fraud, failure to file. Potential imprisonment. Requires immediate attorney representation.
Tax Relief Options
Offer in Compromise
Settle tax debt for less than owed based on:
- Doubt as to collectibility
- Doubt as to liability
- Effective tax administration
Installment Agreements
- Guaranteed: Under $10,000, paid within 3 years
- Streamlined: Under $50,000, paid within 72 months
- Non-streamlined: Requires financial disclosure
Currently Not Collectible
Temporary halt to collection when payment would cause hardship. Statute of limitations continues running.
Innocent Spouse Relief
Relief from joint liability when spouse/ex-spouse improperly reported items without your knowledge.
Tax Planning Strategies
- Entity selection for businesses
- Estate and gift tax planning
- Retirement planning
- Charitable giving strategies
- Tax-deferred investments
- International tax planning
IRS Audit Process
- Notification letter
- Information gathering
- Examination
- Proposed adjustments
- Agreement or appeal
- Tax Court if needed
When to Hire a Tax Attorney
- IRS audit notification
- Tax debt over $10,000
- Criminal investigation
- Liens or levies
- Business tax issues
- International tax matters
- Estate tax planning
- Tax Court litigation
Tax Attorney vs CPA vs Enrolled Agent
- Tax Attorney: Legal representation, attorney-client privilege, court representation
- CPA: Tax preparation, financial statements, some representation
- Enrolled Agent: IRS representation, tax preparation, appeals