Being the subject of a tax controversy can place both financial and emotional strain on individuals and businesses. Both state and federal tax authorities will take any step necessary to collect the money to which they feel they are entitled. But what if a payor does not agree with this assessment? Parties may disagree as to the amount of tax that is owed, or even whether a party must pay taxes at all. When this happens, they have a variety of options to protect their rights.
In rare instances, tax controversies may result in litigation. A Rockville tax litigation attorney might be able to help when a tax controversy requires a visit to U.S. Tax Court or Maryland Tax Court. This includes making arguments before judges but also working towards possible negotiated solutions with the IRS (Internal Revenue Service) for federal taxes or the Comptroller of Maryland for Maryland taxes.
Tax controversies can be a product of disputes between taxpayers and the IRS. They can occur at almost any time and for a variety of reasons. One of the most common reasons for a tax controversy is a dispute over the amount of tax that a party must pay. This can apply to individuals filing yearly tax returns or to businesses filing quarterly reports. It could lead to a disagreement over the reported income as well as the proper use of deductions or tax credits.
While it is possible to resolve these differences within the IRS, payors always have the option to request an appeal without litigation. All taxpayers experiencing a tax controversy have the right to request an appeal with the IRS Independent Office of Appeals for federal cases or the Comptroller’s Office of Hearings and Appeals for Maryland cases. A Rockville tax action lawyer could help someone to exercise their rights as taxpayers in pursuing court cases.
Allegations of underpayment of a party’s taxes are always serious. The IRS has the power to punish underpayment by levying a penalty and collecting overdue taxes.
Allegations claiming a failure to pay taxes at all are far more serious. In these cases, the IRS has the power to refer a case to federal prosecutors who may pursue criminal charges. Criminal charges alleging a failure to submit a tax return or an intentional act of tax evasion carry harsh penalties. A conviction could mean imposing a jail sentence and substantial fines.
In these scenarios, litigation is unavoidable but parties have the right to mount a defense in court. A local tax litigation attorney could help to gather the documentation needed to create reasonable doubt in the prosecutor’s case. This also applies to criminal charges that might be pending in either state or federal courts.
Taking a case to court should always be your last option. However, it may be necessary to protect your finances or your freedom. Certain tax controversy decisions give you the option to pursue an appeal, including filing a lawsuit in Tax Court. Alternatively, allegations of tax crimes, such as fraud or evasion, could lead to criminal charges, which requires a robust defense.
A Rockville tax litigation attorney might be able to help. Whether you want to establish that you have paid your full obligation, or the IRS or a state agency is alleging fraud, a lawyer could help to present clear and powerful arguments in a courtroom setting. Contact a lawyer today to learn more.