The Dreaded Audit
One of the most common tax-related issues that individuals and businesses face is the dreaded audit. An audit is a review of your financial accounts and tax returns by the IRS to ensure that you have accurately reported your income and deductions. It can be a stressful and time-consuming process, but having a tax attorney on your side can make all the difference.
A tax attorney can help gather necessary documents, communicate with the IRS on your behalf, and represent you during any appeals or litigation that may arise. For example, I once worked with a client who was being audited by the IRS for his small business.
The auditor claimed my client had not properly documented some of his expenses, resulting in additional taxes owed. However, after working closely with my client to gather all necessary documents and crafting a compelling argument in his defense, we were able to successfully appeal the audit decision and save him thousands of dollars in taxes.
Unpaid Taxes
Another common issue individuals and businesses may face is unpaid taxes. This can occur for a variety of reasons, such as missed deadlines or disputes over what is owed.
If you owe back taxes to the government, it’s important to address this issue quickly before it snowballs into larger problems like wage garnishments or liens on your property. A tax attorney can help negotiate payment plans or settlements with the IRS on your behalf.
For instance, I once worked with a client who had fallen behind on their personal income taxes due to financial difficulties stemming from divorce proceedings. Together we developed a payment plan that was manageable for my client’s budget while also satisfying their outstanding debt to the government.
Disputes With The IRS
Disputes with the IRS can take many forms beyond just audits or unpaid taxes. For instance, you may disagree with the IRS over the classification of an income source, or have a disagreement over what deductions you are entitled to.
These disputes can be stressful and time-consuming to resolve on your own, but a tax attorney can provide valuable guidance and representation. One example of this is a client I worked with who was running a small business selling products online.
The IRS disagreed with my client’s classification of his sales revenue as “self-employment income” rather than “capital gains,” which would result in significantly higher taxes owed. However, after researching tax codes and working closely with my client to gather additional documentation, we were able to successfully argue his case and secure significant savings on his tax bill.
Collection Actions
If you owe taxes and have not paid them for an extended period of time, the IRS may take collection actions against you. This can include wage garnishments, bank account levies, or liens on your property.
These actions can be devastating to your personal finances, but a tax attorney can help you navigate this process and negotiate more favorable terms. For instance, I once worked with a small business owner who had fallen behind on payroll taxes due to unexpected expenses in her personal life.
The IRS had begun taking collection actions against her business accounts, leaving her struggling to make ends meet. However, after working closely with my client to develop a repayment plan that was manageable for her budget while also satisfying the government’s demands, we were able to stop further collection actions from occurring.
