Independently filing taxes can be a struggle, and mistakes can easily be made. Between misreporting figures and accidentally adding on credits, tax mistakes are common. However, they can result in harsh punishments from the IRS. When looking for legal help with tax-based issues, enlisting the services of a tax lawyer is imperative. They can help decide the best course of action for addressing any problems with the IRS.
What Do Tax Attorneys Do?
Tax attorneys have several duties to fulfill for their clients, but they are most helpful when interacting with local or federal tax authorities like the IRS. Any area of a person’s finances that might be subject to taxes should be discussed with a tax lawyer. These include:
- Income
- Real estate deals
- Trusts
- Wills
- Payroll
- Company dealings
- Capital assets
- Gifts
- Foreign accounts
Estate planning and bankruptcy law are two areas in which tax lawyers should be knowledgeable. These situations can have major tax repercussions.
To perform this role successfully, tax attorneys must keep up with all developments in significant court decisions and proposed legislation that may have an impact on their client’s tax situation. Every year, there are significant changes made to the tax code. This is especially important when legislation is passed to establish reporting and tax assessment guidelines for novel and complicated assets like cryptocurrencies and non-fungible tokens (NFTs). This means that the way these items are taxed can also change.
Common Issues Handled by Tax Attorneys
Tax attorneys need to understand both state and federal tax regulations to properly represent their clients. Between filing guidelines and knowing what counts for different credits or applications, a tax attorney is essential for helping with the IRS. Some of the biggest parts of a tax attorney’s job include:
- Tax Audits: An IRS audit is a review or investigation of the financial records of a company or an individual. This determines whether the information is reported in compliance with tax regulations and confirms the accuracy of the tax amount submitted. These assessments can either be randomly selected or selected in connection with another individual getting audited. They examine any listed income, transactions, or itemized deductions listed on a tax return to verify the information presented.
- Tax Fraud: Tax fraud, or tax evasion, is the purposeful avoidance of income filing. The reasons for committing tax fraud can vary, from saving money to money laundering through business. Sometimes, a tax fraud charge can be sent out when mistakes are made in the filing process, not necessarily on purpose. In these situations, a tax lawyer can help evaluate the information in the case to prove that the misreporting was not intentional.
- Bankruptcy: When struggling financially, both businesses and individuals can file for bankruptcy to try and regain a sense of financial stability by getting any debts reevaluated. During this process, an individual or business will declare bankruptcy and work out a financial plan with creditors that outlines how their debts will be paid. Tax lawyers can assist those filing for Chapter 11, 7, and 13 bankruptcies. They can also help them understand the intricacies of each and which situations they apply to.
When filing taxes, mistakes can happen. The most important part of that process is addressing those mistakes and making sure they are properly remedied. For problems with the IRS, a tax attorney can help find the best option for fixing these issues.
Differences Between the IRS and the FTB
Although seemingly the same entity, the IRS and the Federal Tax Bureau (FTB) are completely different organizations. Both the IRS and the FTB levy income taxes following two distinct tax codes. The Internal Revenue Code is used by the IRS to handle federal taxes. Alternatively, the FTB handles state taxes per the California Revenue and Taxation Code.
The IRS is the bigger of the two offices, and it also brings in more money than the FTB. As a result, the FTB frequently makes use of the data gathered during an IRS audit. They concentrate on particular areas in which a taxpayer is substantially more likely to commit errors. Additionally, the FTB has a history of using more force than the IRS to enforce tax rules and collect unpaid taxes.
FAQs
Q: Can a tax attorney negotiate with the IRS?
A: For any tax-related issue, especially with negotiations about tax returns, speaking with the IRS can help settle any problems with the return. A tax attorney is not required for these negotiations. However, their expertise during these proceedings can be a great asset. They can especially help those unfamiliar with the intricacies of tax law.
Q: Does the IRS have tax advocates?
A: Within the Internal Revenue Service, there is a separate entity called the Taxpayer Advocate Service (TAS). Their responsibility is to make sure that all taxpayers receive fair treatment and are aware of and understand their rights. They serve as an independent body within the IRS that:
- Defends the rights granted to taxpayers by the Taxpayer Bill of Rights
- Assists taxpayers in resolving IRS issues
- Makes suggestions for how to avoid them in the future
Q: How can a taxpayer get help from the IRS?
A: Taxpayers with questions about their returns or filings can contact the IRS directly online or over the phone. They also offer tax advocates who allow volunteers to assist those looking for tax help. There are also taxpayer assistance centers that provide tax assistance services. For issues with any tax refunds, the IRS allows taxpayers to request hearings to dispute any issues with their payments.
Q: Who can help me with IRS problems?
A: When addressing the IRS about any issues regarding tax payments, speaking with an experienced tax lawyer is the best way to secure proper representation. They can help address the initial issue and formally schedule a hearing with the IRS. Enlisting the help of a tax attorney can help ensure that the problems at hand are accurately articulated and presented for judgment.
Finding Legal Representation for Tax Issues
When dealing with the IRS, there is always the risk of receiving penalties or notices that require immediate action. If these problems arise, speaking with a tax lawyer can be the only option for properly evaluating the situation and handling the proceedings accordingly. Coggins Law offers comprehensive legal services regarding tax law. If you are in need of assistance, get in touch with our office today.
