There’s nothing more nerve-racking than receiving mail with the words Internal Revenue Service glaring at you, especially when it’s not a refund check but a threatening IRS Notice.  It can feel overwhelming as the notices are often filled with IRS-specific language, challenging calculations, and, often, a demand for payment.  Feeling a little confused and unsure about what to do next is normal. You may be uncertain if you should contact a CPA or a tax attorney.

When to Hire a Tax Attorney

Most instinctively turn to their CPA or tax accountant to scrutinize the IRS Notice. This might be a good first step, depending on the time of year and if the notice is informational, such as a notice communicating a math error. However, if the notice requests additional information or proposes a penalty or a tax deficiency, the question becomes, “When should I get a tax attorney?”

Here’s why. Tax accountants primarily spend their time ensuring tax compliance by keeping their clients updated on various filings. This often makes it challenging to address notices during peak filing times. To help mitigate the time crunch, researching and addressing the notice is frequently delegated to staff accountants despite having less experience with the tax code. Conversely, tax attorneys primarily devote their time to resolving tax disputes and are dedicated advocates for their clients, making tax attorneys a preferable option for most tax controversies. Consider hiring a tax attorney if you receive:

• Penalty Assessment;
• Audit Letter (566 Letter);
• Request for Additional Information to support your return;
• Notice of Deficiency (“90 Day Letter”); or
• IRS Collection Notices, especially a Notice of Intent to Levy, or file a tax lien.

Additionally, if a tax claim can be disputed, a tax attorney is the best choice to dispute it.

Penalty Abatement

The IRS may assert penalties in numerous instances. According to the IRS Data Book for fiscal year 2023, the most common penalties assessed by the IRS were Failure to Pay, Estimated Tax, and Delinquency-related penalties. Thankfully, penalties are often eligible for relief or abatement.

We dive deeper into penalty abatement here. 

The penalties commonly eligible for relief include:

• Information Return penalty;
• Failure to File penalty;
• Failure to Pay penalty;
• Accuracy-Related penalty;
• Failure to Deposit penalty;
• Dishonored Check penalty;
• Underpayment of Estimated Tax by Corporations penalty;
• Underpayment of Estimated Tax by Individuals penalty;
• Other penalties, as applicable.

Audits & Administrative Appeals

The Internal Revenue Service may also issue letters regarding administrative audits and examinations. Various circumstances may trigger an audit, challenging income tax, employment and payroll tax, sales and use tax, excise tax, property tax, and corporate income and franchise tax filings. Working with a specialized tax controversy attorney ensures the most effective strategy and tactics are deployed to achieve favorable results.

At Tax Workout Group, our team of tax professionals possess subject matter expertise in income, payroll, and sales taxes, enabling effective representation through all administrative and legal stages of the tax controversy process. Tax matters are never generic; each audit is as unique as the client represented. Cases may cover:

• unreported income and improper deductions;
• tax fraud exposure;
• innocent spouse relief;
• state residency tax issues;
• sales, use, and excise tax determinations;
• worker classification;
• cannabis tax law-related matters;
• trust fund recovery penalty assertions;
• foreign bank account report (FBAR) disclosures or lack thereof;
• Global High Wealth Industry Group (IRS LBI Group) examination.

To resolve a tax controversy case effectively, one must possess knowledge of the related tax codes and regulations and be able to navigate the administrative process efficiently and effectively. If the administrative outcome is unfavorable, a tax attorney can pursue a case before the Appeals Division of the IRS and, if necessary, litigate the case in the US Tax Court.

Tax Collection Defense

Finally, if you’ve received an IRS collection notice, hiring a tax attorney can help resolve enforced collection matters and determine the best path to relief. Despite what some unethical tax relief firms would like you to believe, an Offer in Compromise is often the worst path to pursue.

Our IRS collection defense representation may include:

• representing non-filers in filing enforcement actions;
• responding to delinquent tax notices;
• outrunning the collection statute expiration date (CSED);
• preventing and securing releases of IRS levies and liens;
• preventing the  seizure and/or sale of assets;
• reviewing spousal rights and community property issues;
• application and direction of payment strategies;
• taxpayer assistance orders and taxpayer advocate actions; and
• judicial relief from collection action, including tax-bankruptcy.

Hire Experts–Work with The Highest Rated Tax Attorneys

The Tax Workout Group’s specialized Tax Controversy practice group resolves the most complex disputes involving the IRS and state taxing authorities. Our highly rated tax attorneys have the expertise to skillfully guide you through administrative proceedings, appeals, collections, criminal cases, and litigation, no matter which type of tax notice you receive. Next time you receive a threatening IRS or state taxing agency notice, contact Tax Workout Group and let our experienced tax attorneys guide you to a successful outcome.  We craft innovative solutions tailored to fit your unique situation with one goal—resolving your tax claim cost-effectively.

You can start today by scheduling a free tax case evaluation.