Tax Attorney: Signals That You Should Hire a Tax Attorney

Tax Attorney

If any of the following circumstances apply to you personally, you might regard them as a signal that you should consider hiring a tax attorney.

If you can't remember the last time you filed an income tax return with the Internal revenue Service, you might want to employ an attorney to review your IRS account. Even if you do not owe the Internal Revenue Service any money, a tax attorney may be able to find refunds to which you are entitled, but have not collected.

If you receive an assessment letter in the mail from the Internal Revenue Service, it might be a good time to retain a tax lawyer. An assessment letter from the Internal Revenue Service means that the IRS has determined that you owe them money. The assessment letter is the first step in the collection process and it informs you what you owe and why. The assessment letter also indicates what penalties, fees, and interest have been incurred regarding the claimed debt. If you do not respond to the assessment letter, your Internal Revenue Service debt will continue to grow. If you have an attorney respond on your behalf, you should be able to work out a satisfactory settlement.

If the Internal Revenue Service files a Federal Tax Lien against you, you should immediately hire a tax attorney. A Federal Tax Lien will attach itself to all of your property. Everything you own becomes vulnerable under such a collections process. If the Internal Revenue Service has taken this step it is most likely because you failed to respond to several notices regarding a balance due and a Notice and Demand for Payment. At this juncture, you need to make payment arrangements in order to get the lien released. A tax attorney best undertakes this matter.

Once the Internal Revenue Service has filed a Federal Tax Lien against you, they will probably take even more action like attempting to levy your bank accounts. If you receive a Notice of Intent to Levy from the IRS, you need to hire a tax attorney, because you have only thirty days to stop the Internal Revenue Service from levying your bank accounts.

The IRS may, likewise, seek to garnish your wages. Under garnishment, your employer will remove the garnished amount directly from your pay and send it to the IRS.

If you own a business and the IRS levels a Trust Fund Recovery Act penalty against you, seek the counsel of a tax attorney. The Trust Fund Recovery Act Penalty is in response to non-payment of employee withholding and it can be rigidly severe.

People are normally reluctant to go to a tax lawyer. However there are some compelling circumstances in which you should not rely on your own judgment. What are they? Chintamani Abhyankar warns about the circumstances in which you should immediately contact the tax lawyer.

Read more »

Tax Attorney: Cases Where in You Shall Require the Services of A Tax Attorney

Tax Attorney

If the problem taxpayer Internal Revenue Service (IRS) or Department of Foreign Affairs of income, it may be able to solve alone. However, with the intricacies of U.S. tax law, taxpayers may consider the possibility of hiring a tax attorney. Someone who is not a lawyer first call in the phone book. He was careful to look around, ask friends, or even his own lawyer (if he has one) for a good tax specialist is recommended. If the taxpayers of potential clients as a lawyer with extensive experience in dealing with the IRS, in the case of debt management, and in working with real live taxpayers. He should also ask the lawyer for reference.

Taxpayers should also be no doubt that his tax attorney is a member of the American Bar Association and State Bar Association. A customer also must ensure that he knows what his attorney fees, and preparing for payment at the beginning of the consultation. If a taxpayer finds himself in over his head where the IRS comes, he must consult with an attorney. Tax penalty tends to increase, and always in the best interests of the taxpayers to solve the problem, while still relatively small. It would be very expensive to wait until the last minute to a lawyer may have resulted in jail time for tax payers, and legal fees higher to view. Money invested in a tax lawyer can be regarded as a wise investment for the taxpayers. For this reason, a good lawyer to assist the head tax issue before they can begin to accumulate. He could see the potential problems for a company and owners can suggest ways to avoid it. Many small entrepreneurs to see their lawyers as important as an accountant. Some tax attorneys also have an accounting background. If you are facing complex accounting and legal issues, you may want to find a lawyer who is also a Certified Public Accountant.

You have a good tax lawyer if you get housing complex for strategic planning capacity, or is required to file a declaration estate. A lawyer can also help you plan a lawsuit against the IRS to make or help you if you have a tax fraud (such as claiming false deductions and credits) and need special protection. Also, if you are involved in international business and need help with contracts, tax and legal issues others, it is a good tax advisor is the best option to rent. You can also request the services of a tax attorney if you are under criminal investigation by the IRS, if you plan to self-assessment of your case to win before the U. S. Tax Court and when you start a business consultant and legal expert on the structure and tax treatment of your company. Tax lawyers have Juris Doctor (JD) degree and was admitted to the state bar. This is the minimum requirement to practice law. In addition, tax attorneys have received training in tax law. Most Master of Laws (LL.M.) in taxation.

Read more »

Tax Attorney: OKC tax attorney urges CPA awareness of new rules

Tax Attorney

Legislators, judges and the Oklahoma Tax Commission have been busy this year making changes that CPAs and their clients need to keep up with, Oklahoma City tax attorney Richard Kells said Thursday.

Kells also told the 2008 Oklahoma Tax Institute that the Oklahoma Bar Association and Oklahoma Society of Certified Public Accountants are working for an independent tribunal to hear initial disputes involving state taxes, rather than Tax Commission administrative law judges.

As Kells pointed out, currently state tax cases are heard by an ALJ, then by the three-member commission, with adverse rulings appealed to the Oklahoma Supreme Court.

Kells, with Hartzog Conger Cason and Neville, said a ballot issue approved last month by voters provides an exemption from household personal property taxes for totally disabled military veterans. It also applies to surviving spouses. Kells said only 13 counties still assess household personal property taxes. Oklahoma County does not do so.

Another law change requires that applications for ad valorem tax exemptions be filed by March 15, he said. Supporters of this particular ballot issue said it was needed to prevent counties from having to pay refunds for retroactive exemptions.

Kells also reported that Oklahoma's $2 million estate tax exemption is scheduled to rise to $3 million next year, before being repealed in 2010.

Legislators extended the qualifying period for a 48-month gross production tax exemption for wells 15,000-17,499 feet deep and a 60- month exemption for wells 17,500 feet or deeper to July 1, 2011, he explained.

They also extended Quality Jobs incentives to professional sports teams with a payroll of at least $2.5 million, and expanded the program's benefits to 15 years, he said. The existing limitation was 10 years.

Kells also reported on the success of the state's "Clean Slate" tax amnesty program, which provided a window of time for Oklahomans to pay back taxes without interest or penalties. He said the program, estimated to pull in about $30 million, actually garnered state coffers some $81.9 million.

The attorney said he thinks it is questionable whether the law actually provides for double penalties after the program concluded, but Tax Commission officials say it does. However, Kells said Oklahoma tax law still allows an offer and compromise procedure for all but trust fund taxes.

Kells also outlined the results of several court cases, including one in which the Oklahoma Supreme Court held that natural gas stored in Oklahoma is tangible personal property subject to ad valorem taxation.

The case involved taxation of gas stored in Woods County by a Missouri company.

Kells, who said the court found no constitutional problems with taxing the gas, said he understands there is a good chance the case may be appealed to the U.S. Supreme Court.

In another case, Kells said, the Oklahoma justices ruled that a natural gas gathering company is not a public service corporation for purposes of ad valorem taxation.

The distinction is important because public service companies are centrally taxed by the state, at about double the rates of other ad valorem taxpayers who are taxed at the county level.

He said the case involved a gas gathering company that was carved out of a larger company that was a public service corporation.

In an October decision, the justices held unconstitutional an Oklahoma law that prohibited changes in the way gas gathering systems are valued and assessed for ad valorem tax purposes, effective Jan. 1, 2003. the court said the statute unreasonably required different methods for similarly situated companies based on a company's status at an arbitrary past date.

Kells also explained several recent Tax Commission orders to the CPAs, including one from March that involved an out-of-state firm that acquired all the assets of an Oklahoma company, retaining all employees. He said the commission denied the company a jobs credit, reasoning that the jobs already existed in the state, but gave the company an investment credit.

In another ruling, he said, the commission determined that two mechanical workers who signed independent contractor agreements were not employees for purposes of withholding taxes. The panel said the workers had no specific work times and could accept or refuse work, among other factors. Kells said the commission ruled that the two workers who testified about their job status were not employees, but that others who did not appear before the panel were employees.

The tax institute continues Friday at the Clarion Convention Center.

Read more »

Tax Attorney: Attorney evades tax, goes to prison

Tax Attorney

A federal judge Friday ordered a former attorney from Cottonwood Heights to spend three years in prison and to pay a total of about $307,000 for his attempt to circumvent taxes.

A jury convicted Thomas Wood in August after a week-long trial for corruptly impeding the IRS and failing to file taxes for two years.

Although evidence at trial showed Wood hadn't filed taxes since the 1980s, he was only prosecuted for 2000 and 2001. His income totaled $236,000 for the two years, according to a press release by the U.S Department of Justice.

But much of those funds during the two years weren't his and in fact were skimmed from investors' accounts being held in a Canadian Ponzi scheme, the MyCor Investment Club.

Friday's prosecution addressed hundreds of thousands of dollars that Wood spent for himself as well as millions of tax-free dollars he spent and hid on behalf of two other convicted tax criminals, Glenn Ambort and John Benson.

Ambort and Benson floated millions of dollars from the MyCor scheme and Wood hid it by funneling the funds into offshore accounts and high-priced real estate. The funds from duped investors bought the men homes in Deer Valley, Draper and Roosevelt, as well as homes in Malibu and San Luis Obispo, Calif., according to evidence at trial.

While Wood was buying homes and shifting funds to debit card accounts in the Bahamas from 1998 to 2002, Ambort and Benson were awaiting trial on federal charges of tax fraud.

After the Utah Division of Securities investigated Wood's role in the scheme, he pled guilty to a misdemeanor securities violation, according to court documents.

"Mr. Wood's case is troubling in that it arose from the legal profession. It is our hope that this prosecution... will help promote the integrity of the income tax laws by discouraging others from ignoring or circumventing their obligations," U.S. Attorney Brett L. Tolman said Friday.

Read more »

Tax Attorney: IRS ramping up collection efforts, tax attorneys say

Tax Attorney

The current tax season is tougher than most for Americans. With unemployment and home foreclosures at record highs, more can't afford to pay -- and won't pay -- their taxes.

This could prove to be a problem as local tax attorneys are reporting that in the past few years, the Internal Revenue Service has increased its collection practices. Those actions could be more pronounced during the economic downturn.

"There are huge revenue pressures on the federal and state governments," said Thomas Basset, a certified public accountant at accounting firm BKD. "Anything that can collect revenue will be funded. We're being driven by the state of the economy and a trillion-dollar deficit. There is a lot of underreported income out there, and it's more politically popular for Congress to tell the IRS to collect from people who already owe the government than to raise taxes."

Congress has played an integral part in raising IRS collection efforts.

"What I sense happened was that in the second Bush administration, law enforcement in the tax area took on a much higher authority, and more people were hired at the IRS from 2004 through 2008," said attorney David Capes, of Capes Sokol Goodman & Sarachan in St. Louis. "Congress specifically charged the IRS to do more in terms of criminal tax enforcement and gave them more resources to do that both in terms of more agents and new rules regarding rewards for people who provide information about people who cheat on taxes. As a result, the IRS is beginning to generate more criminal tax cases."

In a report issued last summer, the IRS said in fiscal year 2007 it increased its number of tax investigations and recommended more cases for prosecution. In 2007, the Justice Department prosecuted more tax criminal cases than any other year since 1998.

According to Michael Devine, IRS spokesman for Missouri and Kansas, the IRS has not put an emphasis on increasing its collections.

"Collection is what the IRS does and one of the key missions of the organization," he said.

Taxpayers can make mistaken assumptions about what they can do when they can't afford to pay.

"People don't realize that they have to both file and have to pay," Capes said. "But many who can't pay or get behind don't realize that even if they can't pay, they have to file. People wrongly try and decide to defer tax liability to keep the lights on and don't remit payroll taxes."

Harry Charles, a solo practitioner in Clayton who specializes in tax disputes, said that many of the clients he is seeing have been affected by the increase of IRS collection practices.

"There's a lot of broke people out there that are stretched too thin," he said. "[Taxpayers] may have been managing their debt in the past and playing catch-up when the IRS wasn't aggressive, but now they can't run anymore. Or there's been an increase in audit activity, and [the taxpayers] can't afford to pay the unexpected tax."

In January 2009, the IRS announced it would take steps to help distressed taxpayers pay their taxes. But one of its most touted programs is considered by many to be unmanageable.

The offer-in-compromise program is used when a taxpayer makes an offer to the IRS to pay off his or her debt. This offer can be accepted, and the rest of the debt is removed.

Charles said the program is almost impossible to use, citing the process and criteria that a taxpayer must meet to use the program. Kenneth Kleban, a partner with Bryan Cave, has also encountered issues, particularly in smaller cases.

"Under current law, taxpayers must pay 20 percent of the offer that they're making to the IRS at the time of submitting their application. This has discouraged taxpayers from entering the program," he said. "Also, the application for the OIC program is quite extensive, which isn't an unreasonable request by the government, but it still can be a hassle for a taxpayer to complete."

Sylvan Siegler, a partner with Shook, Hardy & Bacon, said he considers using OIC in his cases but normally doesn't because there isn't much hope in navigating through it.

"Because of the attitudes that IRS has taken, it's very often an elusive procedure," he said. "The bureaucracy doesn't favor resolution in offers-in-compromise."

According to Taxpayer Advocate Service spokeswoman Nina Olson, fewer taxpayers use the program than before, and the IRS accepts fewer offers as well. Olson testified before the U.S. House Ways and Means Oversight Subcommittee that the offers the IRS received declined 65 percent from FY 2001 to FY 2008 and that the offers accepted declined even more, by 72 percent. The Taxpayer Advocate Service is an independent organization within the IRS that assists taxpayers who need help with navigating through the IRS collections process.

But some changes are being made to the program with the IRS allowing a second review of applications of individuals who've experienced significant life changes, such as loss of a job or home. It's also giving leniency to those who may have missed scheduled payments for back taxes.

Read more »