The proper payment of taxes is central to the financial health of individuals and businesses. State, federal, and local governments will use any means necessary to obtain the money that they are owed. In some situations, this can include seeking payment through lawsuits or other legal action. Tax controversies can arise for many reasons. The Internal Revenue Service (IRS) might believe that an underpayment has occurred, that a person or business has failed to file a tax return, or that criminal activity has taken place. When this happens, it is necessary to find a dedicated tax lawyer to protect one’s legal rights and finances.
A Washington DC tax litigation attorney could help protect your rights during tax controversies that occur. This may include filing an appeal with the IRS, participating in settlement or negotiation talks, and even filing lawsuits that dispute the decisions of the IRS.
Common Types of Tax Controversies That May Require Litigation
A tax controversy describes any dispute that arises between the IRS and taxpayers. These taxpayers may be businesses or individuals, and every entity that takes in an income must pay a percentage of that income to the IRS. A dispute concerning the correct amount of this payment is the simplest example of a tax controversy.
A party may also wonder whether they have an obligation to pay taxes at all. Individuals who make below a certain threshold of income and businesses that do not turn a profit may not need to file tax returns. The IRS might still attempt to argue that non-payment is a criminal matter.
Finally, disputes may arise over allegations of apparent fraud or tax evasion. In this case, it might be necessary to defend one’s actions in criminal court, as well as to participate in negotiations with the IRS. A Washington DC tax trial lawyer is prepared to defend parties against tax controversies in any setting.
Notices from the IRS
The IRS is required to issue a Notice of Deficiency before assessing additional tax. The taxpayer has 90 days to file a Petition to U.S. Tax Court to challenge the assessment, although it will be referred to IRS Appeals for settlement if the taxpayer previously bypassed IRS Appeals.
The IRS is required to issue a Notice of Intent to Levy and Your Right to a Hearing before levying a taxpayer with unpaid taxes that have already been assessed. If the taxpayer requests a Collection Due Process within 30 days of the Notice and disagrees with the Notice of Determination from IRS Appeals, the taxpayer has 30 days to file a petition to U.S. Tax Court. The Court will review the determination and the IRS is prohibited from collecting the taxes until the case is closed. However, this time is added back to the 10-year collection statute of limitations.
Helping Parties In or Out of Court
Most people imagine litigation as taking place in a courtroom setting. However, even if a case is destined to eventually arrive in court, there is still much that occurs before the case gets to a final trial. Tax controversy cases are no exception.
In fact, it is rare for a tax controversy case to ever go to trial. The IRS is keen to receive their money without going through the expense and hassle involved in a trial. As a result, it is possible to settle many tax controversies through negotiation and compromise. As soon as the IRS notifies a party of a tax problem, a local tax litigation attorney could act to identify the issue and work out a solution. This includes resolving the case with with IRS Appeals or IRS opposing counsel. It is only if these alternatives fail that the case will go to trial.
One of the benefits of litigating in the U.S. Tax Court is that the taxpayer does not have to prepay the taxes as required for required for litigating before a U.S. District Court or the U.S. Court of Federal Claims.
Learn Your Options with a Washington DC Tax Litigation Lawyer
Disputes with the IRS must always be taken seriously. Not only could the outcome of a tax controversy require you to pay overdue taxes with significant penalties, but alleged fraud or evasion could lead to criminal charges. When a tax dispute arises, it may be necessary to hire an attorney with litigation experience.
A Washington DC tax litigation attorney could provide essential assistance. Whether a case requires participation in settlement talks or presenting a case in court, a lawyer could work to protect you. Contact one today to learn more.