Our 25 years of experience includes the representation of individuals and businesses at all levels of a tax controversy in matters involving:
In recent years, IRS and New York State audit rates have risen dramatically for most taxpayers. Within the past few years, the audit rate for individual taxpayers has increased by 25%, and the audit rate for high-income taxpayers has doubled. Additionally, if you are a business operating in New York State your chance of being selected for a sales tax audit has significantly increased in the past few years. Bluestein and Weber represents individuals and businesses who are facing an audit of their income, sales or employment tax returns by the IRS or New York state taxing authorities. If your tax return(s) is selected for examination, you need experienced and knowledgeable legal counsel to make sure that your interests are protected throughout the audit process.
Although many taxpayers enjoy significant tax benefits from filing joint returns, these benefits can be outweighed by the exposure to joint and several liability where a tax deficiency or unpaid balance exists. The IRS might also offset a current year joint refund to pay a separate obligation of one spouse. In 1998, the IRS provided expanded spousal relief for taxpayers who file joint returns. Three types of relief exist with the best option depending upon whether the tax liability arose as a deficiency or as a filed joint return with a balance, and upon the current marital status of the parties. If you owe income taxes from an activity or income of a spouse and if you don’t believe you should be liable for payment of the tax if you didn’t benefit from the activity or income, you may be eligible for relief. Call the attorneys at Bluestein and Weber for a review and analysis of your options for potential relief.
A worker classification case arises when a business owner reports treats an employee as an independent contractor and fails to collect and pay the required social security and Medicare taxes for that employee. If the government reclassifies the employee, the business becomes responsible for the unpaid social security, Medicare and income taxes it failed to withhold and pay over to the IRS. Owners, corporate officers (link to corporate officer liability and trust fund recovery penalty cases) and others in positions of authority can also be held liable in these instances. It is imperative both the business and responsible officers seek counsel from attorneys who are knowledgeable in the nuisances of worker classification cases and who can give competent and thorough advise to minimize exposure for both the business and officers.
The enforcement initiatives of both the IRS and New York State have increased dramatically in recent years. Generally the first contact will be by letter, but if no response is made may proceed to contact by phone or in person. You will usually be given a chance to voluntarily pay what you owe before forced collection action. However, if you don’t or can’t pay your debt in full, or make arrangements to address the liability, the IRS can resort to powerful collection enforcement action. It is important to understand that, unlike a collection agency, the IRS or any state taxing authority does not have to file a civil law suit against you in order to obtain a legal judgment; it only has to determine your tax debt, properly notify you, and make an assessment against you. If you won’t or can’t pay the liability or if you refuse to engage in the process, the IRS can file a notice of federal tax lien against your property, levy your bank accounts and wages and legally seize your assets. Similar (but not identical) powers exist for the state taxing authorities to forcibly collect a tax debt. Ignoring the IRS or the State is just not a solution. Call the attorneys at Bluestein & Weber today. We will work with you to develop a real resolution to your tax problem.
For federal tax purposes, a lien arises on all of the taxpayer’s real and personal property, and rights to such property, after the assessment has been made and proper notice has been mailed. The federal tax assessment lien is sometimes referred to as the “secret lien” because only the IRS and the taxpayer are aware of its existence, but the assessment lien is nevertheless effective against all others with the exception of those specifically identified in the Internal Revenue Code. The assessment lien should not be confused with a filing of a Notice of Federal Tax Lien, which is nothing more than a public proclamation of the existence of the assessment lien. However, it is important to note that there are many ways to deal with a Notice of Federal Tax Lien. First, a taxpayer has a right to appeal the filing of a Notice of Federal Tax Lien within certain time constraints. Second, even if the Notice of Lien is not appealed timely a solution to the Federal Tax Lien may be in the form of a Request for Discharge of Lien, Request for Subordination of the Lien, Request for Withdrawal of the Lien or Request for Release of the Lien. There are many potential solutions to deal with and legally transfer property secured by a Federal Tax Lien. The key to finding the right solution depends on the particular circumstances of your case.
Prior to actually levying on assets to enforce collection, the Internal Revenue Service must send certain required notification. The IRS will send what can be called “warning notices” which are entitled Notice of Intent to Levy. These notices will bear symbols in the upper right hand corner, such as CP 504 or CP 523. They are, in effect, notices to encourage you to pay the liability before enforced collection action is taken. A Final Notice of Intent to Levy, however, must be sent before an actual levy can be issued. This notice, which is the one that cannot be ignored, will contain a Form 12153 for a Collection Due Process Appeal. It will also provide information as to your Collection Due Process Appeal rights. It allows 30 days to file said Appeal. Absent the filing of a Collection Due Process Appeal, the Internal Revenue Service can then levy on wages, bank accounts and other property.
The ability to request a Collection Due Process Hearing or an Equivalency Hearing can be a powerful tool to control the collection process and propose less intrusive collection alternatives. It can even be used to raise the validity of the underlying liability at the hearing if you did not receive a notice of deficiency for the liability in issue or did not otherwise have an opportunity to dispute the liability. However, timing and strategy decisions come into play depending on the type of tax liability in issue. It is important to contact a law firm that is knowledgeable in tax procedure to analyze your particular situation before valuable Appeal Rights are lost or misused.
An offer in compromise is an agreement between the IRS and the taxpayer whereby the IRS agrees to settle a tax liability for less than the full amount owed. Absent special circumstances, an offer will not be accepted unless the amount offered is equal to or more than the Service’s “reasonable collection potential” or “RCP”. The RCP is a formula created by the IRS to determine and measure what it believes to be the amount it could collect through levy and seizure of assets and an installment payment agreement which considers future income. Although the offer in compromise program is a powerful tool that we have used to save our clients millions of dollars, because it is a mathematical formula that is applied objectively to each individual taxpayer, it is very important for you to be wary of claims by practitioners that your tax debts can be settled for “pennies on the dollar.”
At Bluestein and Weber, we analyze each individual situation to strategize and determine the best solution for your case. If an offer in compromise is a potential solution to your tax problem, we analyze your particular circumstances to advise you as to both the offer process and the correct amount of your offer. Once determined, we prepare your offer, submit it to the IRS and represent you before the IRS throughout the entire process. However, if you are not a candidate for an offer in compromise, at Bluestein and Weber we explain to you why an offer is not the right solution to your tax problem and counsel you as to other potential solutions. Any practitioner can take your money and file an offer in compromise, but how many counsel you on the likelihood of success, and when low, develop an alternate strategy to solve your tax problems? The offer in compromise program is a powerful tool for solving tax problems, but is not the right tool for every taxpayer. Call the attorneys at Bluestein and Weber today to determine if it is the right solution for you.
If you cannot pay the full amount of your tax liability and if you are not a candidate for an offer in compromise, a monthly installment payment agreement may be the right solution for you. However, it is important that you understand, even with an accepted payment agreement in place you will continue to accrue penalty and interest until the liability is paid in full. Because of this you should always consider potentially less costly alternatives, such as a bank loan. Additionally in cases involving severe hardship, it may be possible to have your case held in abeyance, or categorized as “currently not collectible” for the period of time that you experience the hardship. However, again it is important to remember that even during this time that the IRS refrains from collection while you get back on your feet, penalty and interest continues to accrue. Before entering into a payment agreement or requesting currently not collectible status, all options should be reviewed so that you can make the best decision possible to address your tax problem.
A corporation is a distinct legal entity and has many of the same legal rights and obligations as do individuals. One advantage of incorporating is that it is an entity that is separate and distinct from the individuals who own and control it. In most cases, these individual owners have limited or no legal exposure for the corporation’s liabilities.
However, this is not true when a corporation owes certain types of taxes to the federal and state tax authorities. If a corporation owes “trust fund taxes” which are taxes it collects on behalf of the government such as employment taxes or sales tax, corporate officers and others in positions of authority face personal exposure. If you are an owner, officer or responsible person for a corporation that owes trust fund taxes to the IRS or New York State, call the attorneys at Bluestein and Weber.
We have provided advice and representation to hundreds of businesses and individuals which have saved our clients millions of dollars and provided them with real solutions to their tax problems.