Tax Law Blog | IRS Tax Attorneys

Why a tax lawyer can make a difference:

* Once you retain a tax lawyer, the IRS must stop calling you.  The IRS is required to conduct all negotiations - telephone calls, meetings, etc. - through your attorney.  This valuable “buffer” allows time to determine the most accurate responses to IRS inquiries, not “on the spot” responses that cannot be taken back.
* Your tax lawyer will have prior relationships with IRS collectors and auditors and understand how to keep your head out of the mouth of the bear.
* Your tax lawyer will understand IRS laws that protects your wages, bank accounts, and property from IRS garnishment or seizure.
* Your tax lawyer will know when to advise you if bankruptcy is the best way out, the differences between Chapters 7, 11 and 13, and be able to represent you in U.S. Bankruptcy Court.
* Your tax lawyer will keep any statements made by you to him or her protected by the attorney/client privilege.  They generally cannot be revealed to the IRS or anyone else.
* Your tax lawyer will represent you before IRS Appeals and U.S. Tax Court to seek judicial review of audit or collection cases.
* Your tax lawyer may have previously worked for the Internal Revenue Service Office of Chief Counsel or the Tax Division of the U.S. Justice Department, and will bring that background and experience to the table.

Determining whether to hire an attorney to help you out of an IRS jam is an important decision.  If the nature of your case requires it, the right attorney can offer significant advantages.

Source

Tax penalties present taxpayers with unique issues to consider. Wilson v. Commissioner, T.C. Summary Opinion 2008-91, describes the situation where a tax attorney represents a taxpayer with a tax penalty that was imposed for a tax return prepared by the attorney’s firm. The issue that the case describes is the conflict of interest that the tax attorney has in representing taxpayers in this situation.

In Wilson, the taxpayers failed to report their Social Security income on their federal tax return. The taxpayers had their tax return prepared by Tax Help, Inc. The IRS sent the taxpayers a notice that it intended to increase the taxpayers’ tax liability to account for their Social Security income. The taxpayers submitted an amended tax return to reflect this income and the IRS assessed an accuracy related penalty. The taxpayers filed a petition to redetermine the tax, apparently, arguing that the penalty should be abated.

There are several defenses that taxpayers may assert to ward off accuracy related penalties. The most common defense is that there was no understatement of tax. If there was an understatement, another common defense is that the taxpayer acted in good faith in relying on a professional tax return preparer.

The U.S. Tax Court said that:

Petitioners failed to demonstrate reasonable and good faith reliance on their tax return preparer. In fact, at the trial petitioners’ attorney, who is also an accountant and employed at Tax Help, Inc., did not pursue this defense in any meaningful way but instead rested his case on [a] baseless contention…

The U.S. Tax Court also noted that:

Insofar as they might be indicative of the nature or quality of advice dispensed at Tax Help, Inc., petitioners’ attorney’s contentions tend to call into question whether the return preparer had sufficient expertise to justify petitioners’ reliance.

This is harsh language from the relatively reserved U.S. Tax Court. The issue that this raises is whether, given the facts described by the court, the tax attorney had an impermissible conflict of interest. As an employee of Tax Help, Inc., the attorney may have owed some duty of loyalty to his employer. As a tax attorney for the taxpayer, the attorney also owed a duty to the taxpayers as clients. The tax attorney’s duty to his clients is to be a zealous advocate for the taxpayers, which may have been muted by his duty to his employer. A tax attorney in this position may not be able to zealously argue that his employer was negligent.  An outside tax attorney would be in a better position to make this type of argument.

Source

Tax penalties present taxpayers with unique issues to consider.  Wilson v. Commissioner, T.C. Summary Opinion 2008-91, describes the situation where a tax attorney represents a taxpayer with a tax penalty that was imposed for a tax return prepared by the attorney’s firm. The issue that the case describes is the conflict of interest that the tax attorney has in representing taxpayers in this situation.

In Wilson, the taxpayers failed to report their Social Security income on their federal tax return. The taxpayers had their tax return prepared by Tax Help, Inc. The IRS sent the taxpayers a notice that it intended to increase the taxpayers’ tax liability to account for their Social Security income. The taxpayers submitted an amended tax return to reflect this income and the IRS assessed an accuracy related penalty. The taxpayers filed a petition to redetermine the tax, apparently, arguing that the penalty should be abated.

There are several defenses that taxpayers may assert to ward off accuracy related penalties. The most common defense is that there was no understatement of tax. If there was an understatement, another common defense is that the taxpayer acted in good faith in relying on a professional tax return preparer.

If the IRS is looking at your personal or business tax returns, it’s time to contact Tax Attorney Kenneth L. Sheppard, Jr., at Sheppard Law Offices.  Mr. Sheppard has built a successful national IRS Tax Resolution practice that includes handling routine as welll as complex individual and business tax issues.  He is prepared to help you resolve your tax problems today!

You DO have legal rights, including the right to a court hearing if the government is acting illegally or unfairly.  Work with Experienced Tax Lawyer Ken Sheppard at Sheppard Law Offices to resolve your IRS problems with:

• Defense in IRS audits, proving that the IRS is wrong
• Offers in Compromise
• Installment Agreements
• Requests for Penalty Abatement
• Preparation and Filing of Delinquent Tax Returns
• Administrative Appeals and Hearings in Federal Tax Court

Contact Tax Lawyer Kenneth L. Sheppard, Jr., for a free one-half (1/2) hour initial consultation in person or by phone.  We help people nationwide solve their federal tax problems.

Contact Tax Attorney Ken Sheppard today. Call 1 (877) 505-9455 toll free.

Tax professionals in a local tax practice (CPAs, accountants, enrolled agents, attorneys) have an inherent “conflict of interest” for aggressive representation of any one client because they do not want to antagonize the local  IRS  revenue officer or examiner in a way that will have a negative impact on their other clients.   The  IRS  will take advantage of the timid local practitioner who finds it necessary to generate a positive image for the balance of his client base.

Sheppard Tax specializes in dealing with IRS controversies, problems and issues of every kind throughout the United States .  We have active cases pending throughout the United States .  Having worked within the IRS at a high executive level, we understand the most effective ways to deal with the IRS to advocate a reasonable solution to resolve your IRS problems.

CPAs, accountants, bookkeepers, enrolled agents, and attorneys without a tax specialty may not have the time, experience, education, insight or technical skill to deal with the technical analysis, legal research, identification of issues, interpretative creativity and insight, negotiating skills, knowledge of the IRS , or technical writing ability necessary to effectively prevent avoidable tax overpayments. The person who prepares your tax return may only have six weeks of training, and that training may be limited to how to put numbers into an IRS income tax return. Your bookkeeper is not a tax expert. Your CPA prepares tax returns for approximately three months out of the year and spends the balance of the time preparing books, records, and financial statements. Most, if not all enrolled agents are not tax lawyers. Attorneys may have a general or a specialized practice that does not include tax issues and problems. Nevertheless, accountants, CPAs, bookkeepers, enrolled agents, and non-tax attorneys will usually agree to represent you if you approach them with a tax issue even if they do not have the training or experience to handle difficult, complex, or creative tax issues.  The IRS can be expected to take advantage of those representatives who are not specialists in the tax law and who do not deal with the IRS on a full-time basis.

A tax attorney can do something an accountant cannot do. An experienced tax attorney can thoroughly research a tax statute and master it. He will know its legislative history. He will be familiar with the Treasury regulations and IRS rulings on that statute. He will penetrate the many court decisions involved in the litigation of the tax statute. He will have read tax articles and books that deal with the tax statute. It is improbable that your accountant has the training or experience that would permit him to penetrate the complexity of the tax law on a particular tax issue. It is also not likely that the accountant can take the time out of a busy accounting practice, working with numbers and preparing financial statements, to master the vast array of difficult tax law that bears on a tax statute.

Even worse is the fact that the mind-set of an accountant is to see “black and white” rather than the “gray” because they are trained to be precise with numbers. Tax law is drenched with ambiguity where there is mostly no answer that is right or wrong. Tax lawyers are trained to seek and find the ambiguity in the law (i.e., the “gray”). Tax law ambiguity can be used as a “sword” to attack and IRS position and also as a “shield” to protect the taxpayer.

However, not all tax attorneys are equal just as, for example; professional golfers have difference levels of skill and ability. Tax attorneys have different levels of creativity, insight and skill.

The most important attribute of a good tax attorney is to be “creative” with the tax law. This creativity may arise in many ways. A creative tax attorney will use interpretative skill to find support of a taxpayer position. A creative tax attorney will find a gap in a statute or a regulation (a “tax loophole”) that permits favorable tax treatment in situations not covered by the statute under consideration. A creative tax attorney will be able to identify inconsistencies by the IRS in its published positions or private ruling letters. A creative tax attorney will use interpretative skills to spin facts, case law, regulations in favor of the taxpayer. Creativity is unlimited in its potential to interpret and apply the law or the ability to develop that knowledge through research skills.

Any attorney is a better representative than a non-attorney because “taxes” is based on law written by the Conges and non-attorneys are not trained to research and interpret tax law.  As between two attorneys, a specialist in taxes is a better choice as the result of superior training and experience.  As between to tax attorneys who both specialize in IRS problems and controversies, a firm that has IRS experience, as we do, have better insight to the inner workings of the IRS .  Knowledge of the administrative processes of the IRS is a distinct advantage in choosing your representative.

In explaining what a tax lawyer does that other representatives cannot do, it is helpful to understand what is meant by a legal issue. Legal issues are developed from expert creative analytical, interpretative, and technical research skills.  Technical research includes: determining Congressional intent from the legislative history of the tax law; a search and analysis of the provisions of the applicable provisions of the Internal Revenue Code, Treasury tax regulations, IRS revenue rulings, private letter rulings and procedures and the IRS administrative procedures and guidelines..

The fact that tax law is complex and arcane is well known. This complexity is he reason a qualified tax attorney is in a superior position to protect a taxpayer from overpaying a tax liability - provided that attorney has strong creative, analytical and interpretative skills.  Interpretative and analytical skills involve the sophisticated ability to read tax legislation, regulations, cases and other authority to identify subtle distinctions, ambiguity or supportive facts, issues, and argument.

If the IRS is looking at your personal or business tax returns, it’s time to contact Tax Attorney Kenneth L. Sheppard, Jr., at Sheppard Law Offices.  Mr. Sheppard has built a successful national IRS Tax Resolution practice that includes handling routine as welll as complex individual and business tax issues. He is prepared to help you resolve your tax problems today!

The IRS (Internal Revenue Services) provides various back tax resolution programs to tax payers only after analyzing their financial condition. It is important for the tax payers to be well aware of the tax obligations of IRS before they actually consider solving back taxes.

The simplest way to settle the back taxes is the wholesome payment of tax payer’s back taxes to the IRS. It is quite struggling for the tax payers to avail the information about their tax account. However, Fully Pay Service is there to simplify the task. It provides the accurate payoff amount and its instructions. Moreover, it will regularly follow up with the IRS and ensure about the money transactions.

Offer in Compromise is another way to settle IRS back tax debt. As IRS Offer in Compromise is an effective measure for the tax payers who are not able to pay their back tax dues. It helps to lower down the liability according to the financial conditions of the tax payers.

The next tax settlement option is Installment Agreement that allows the tax payers to pay their back taxes through monthly payments. Besides offer in compromise, installment agreement is another alternative for those who find it difficult to pay their back taxes. It either pays full or half back tax liability to the IRS that depends on the circumstances of the tax payers.

If the IRS is not able to collect the taxes from the taxpayer, then they keep the taxpayer’s account on Currently Not Collectible (CNC) status. With this, the IRS does not undertake collection activity but the tax liability on the taxpayers will be continued. Once, the tax payer will pay off the tax liability, the CNC status will remove from his account.
Source
To find a good lawyer visit the Law Firm Directory.

A Great Tax Attorney is Ken Sheppard who services all 50 states.

The Senate today passed, by a 72-13 vote, the housing stimulus bill (H.R. 3221, The American Housing Rescue & Foreclosure Prevention Act).  The House on Thursday had approved the measure by a 272-152 vote after President Bush earlier in the day dropped his veto threat and urged Republicans to support the bill.  There are four main tax cuts in the $15.1 billion tax package:

* Refundable tax credit for first time home buyers (10% of the purchase price, up to a $7,500 credit)
* Additional standard deduction for real property taxes for non-itemizers ($500 single/$1,000 joint)
* Expansion of Gulf Opportunity Zone incentives
* Temporary increase in the low-income housing tax credit

The major tax increases in the package are:

* Information returns for merchant payment card reimbursements
* Delay implementation of worldwide allocation of interest until 2011
* Modification of the § 121 exclusion of gain on sale of a principal residence

Contact IRS Tax Attorney Ken Sheppard. He is an Experienced Tax Lawyer who services all 50 states.

If the IRS is looking at your personal or business tax returns, it’s time to contact Tax Attorney Kenneth L. Sheppard, Jr., at Sheppard Law Offices.  Mr. Sheppard has built a successful national IRS Tax Resolution practice that includes handling routine as welll as complex individual and business tax issues.  He is prepared to help you resolve your tax problems today!

Protect Your Assets from IRS Seizure

You DO have legal rights, including the right to a court hearing if the government is acting illegally or unfairly.  Work with Experienced Tax Lawyer Ken Sheppard at Sheppard Law Offices to resolve your IRS problems with:
Defense in IRS audits, proving that the IRS is wrong

Offers in Compromise

Installment Agreements

Requests for Penalty Abatement

Preparation and Filing of Delinquent Tax Returns

Administrative Appeals and Hearings in Federal Tax Court

Contact Tax Lawyer Kenneth L. Sheppard, Jr., for a free one-half (1/2) hour initial consultation in person or by phone.  We help people nationwide solve their federal tax problems.

Abstract

Tax and fiscal policy will loom large in the next president’s domestic policy agenda. Nearly all of the tax cuts enacted since 2001 expire at the end of 2010 and the individual alternative minimum tax (AMT) threatens to ensnare tens of millions of Americans. While a permanent fix palatable to both political parties has proven elusive, both candidates have proposed major tax changes. This report describes how we performed our modeling and analysis, outlines the major tax proposals, and discusses the implications of their policies for the revenue raised, taxpayer economic activity, and the distribution of the tax burden.

Introduction

Tax and fiscal policy will loom large in the next president’s domestic policy agenda. Nearly all of the tax cuts enacted since 2001 expire at the end of 2010. The individual alternative minimum tax (AMT) threatens to ensnare tens of millions of Americans in a web of pointless complexity and higher taxes, but a permanent fix palatable to both political parties has proven elusive. In the past year, the federal budget deficit has ballooned, and, more worrisome, large projected increases in spending on Social Security, Medicare, and Medicaid will put unprecedented demands on federal government revenue sources in the coming decades.

Fundamental reform of our tax system is one way to resolve these problems, but, at least in part because reform creates both winners and losers, the leading presidential candidates have not addressed it seriously. Nonetheless, both candidates have proposed major changes to the nation’s tax laws. Senator McCain would permanently extend the 2001 and 2003 tax cuts, increase deductions for taxpayers supporting dependents, reduce the corporate income tax rate, and allow immediate deductions for investments in certain capital equipment. Senator Obama would permanently extend certain provisions of the 2001 and 2003 tax cuts primarily affecting taxpayers with incomes under $250,000 but repeal the cuts in the top two marginal income tax rates ahead of their scheduled expiration in 2010; increase the maximum rate on capital gains; raise the top tax rate on qualified dividends from its current level (but keep it below pre-2001 levels); and enact new and expanded targeted tax breaks for workers, retirees, homeowners, savers, students, and new farmers. Senator McCain proposes to extend permanently and increase the AMT “patch” that has prevented most individuals and families with incomes below $200,000 from being affected by the tax and lowered the tax for others, and in our interpretation of his proposal, Senator Obama would also extend the patch. Each candidate would also increase the estate tax exemption and reduce the estate tax rate compared with current law in 2011 and beyond, although Senator McCain would cut the tax much more than Senator Obama. Finally, each candidate promises to broaden the tax base and reduce corporate loopholes. McCain lists eight breaks for oil companies as targets but, other than that, is short on details for his pledge to eliminate “corporate welfare.” Obama identifies a variety of steps, including basis reporting for capital gains, taxing carried interest as ordinary income, and enacting sanctions on international tax havens that don’t cooperate with enforcement efforts, but he would also need additional as-yet-unspecified policies to achieve his revenue target for base broadening.

Although both candidates have at times stressed fiscal responsibility, their specific non-health tax proposals would reduce tax revenues by an estimated $4.2 trillion (McCain) and $2.8 trillion (Obama) over the next 10 years. Both candidates argue that their proposals should be scored against a “current policy” baseline instead of current law. Such a baseline assumes that the 2001 and 2003 tax cuts would be extended and the AMT patch made permanent. Against current policy, Senator Obama’s proposals would raise $800 billion and Senator McCain’s proposals lose $600 billion.

The two candidates’ tax plans would have sharply different distributional effects. Senator McCain’s tax cuts would primarily benefit those with very high incomes, almost all of whom would receive large tax cuts that would, on average, raise their after-tax incomes by more than twice the average for all households. Many fewer households at the bottom of the income distribution would get tax cuts and those tax cuts would be small as a share of after-tax income. In marked contrast, Senator Obama offers much larger tax breaks to low- and middle-income taxpayers and would increase taxes on high-income taxpayers. The largest tax cuts, as a share of income, would go to those at the bottom of the income distribution, while taxpayers with the highest income would see their taxes rise significantly.

The impact of the tax code on economic activity under each candidate’s policies would differ in several important ways. Under Senator McCain’s proposed policies, the top marginal rates (35 percent on individual income and 25 percent on corporate income) would be significantly lower than under Senator Obama’s plan (39.6 and 35 percent, respectively). McCain’s reduced individual and corporate rates could improve economic efficiency and increase domestic investment, but the larger future deficits would reduce and might completely negate any positive effect. In contrast, Senator Obama’s proposed new tax credits could encourage desirable behavior, particularly if the childless EITC and payroll tax rebate encourage additional labor supply among childless low-income individuals. However, he would also direct new subsidies at an already favored group—seniors —and an already favored activity—homeownership—which could probably be better directed elsewhere.

(End of excerpt. The entire report is available in PDF format.)