An Internal Revenue Service (IRS) lawyer recently opened a narrow window into the secret operations of one of America’s largest IRS field offices, stating in a letter to ten U.S. Senators that the Internal Revenue Service routinely ignore serious issues of fraud and abuse in two out of its New York Field Offices. In response, the Internal Revenue Service cut off communications with the representatives. This is quite extraordinary. The IRS, under current law, is not supposed to communicate with taxpayers who are challenging their tax debt. The lack of communication has left many taxpayers frustrated and looking for an IRS Lawyer in Colorado Springs that can protect their rights.
The ultimate goal of the Internal Revenue Service is to collect federal tax debt owed by taxpayers. If it is not collected, the IRS can then pursue collection through various legal means including attachment of property, garnishing wages, tax liens and bankruptcy. These tactics are designed to force taxpayers to pay what they owe. In some cases, these aggressive tactics may even push taxpayers into bankruptcy. A CCH lawyer can help taxpayers understand their rights and get the IRS to stop taking excessive measures or resorting to extreme measures to collect overdue taxes.
Attorneys in the Denver area can best help taxpayers when dealing with the IRS by defending them in the Tax Court. Currently, the IRS holds over $10 billion in unpaid taxes, which it intends to recover by any means necessary. Unfortunately, pursuing one’s taxes by using illegal methods is often an exercise without results. For every small case a taxpayer wins in the Tax Court, the IRS makes many more small mistakes in the process. It is therefore vital that a small case win be defended aggressively in Tax Court to protect the client.
Often, lawyers are paid on a contingency basis which means that the client simply pays the attorney fees when the case is settled. However, contingency fee payments can also be arranged through payment plans with predetermined amounts of money down. The IRS may propose an amount for attorneys fees in advance and the taxpayer can accept or reject this amount. If a settlement arrangement cannot be reached, the case can go to trial. Many taxpayers have won large settlements for pennies on the dollar when the IRS tried to put them in tax court.
In Tax Court, a lawyer can make his or her argument to a three-judge federal appeals court panel. In doing so, the lawyer should explain why the IRS is beyond the jurisdiction of the tax court and the judge should dismiss the case. Many taxpayers have found this result when the IRS tried to force a compromise agreement. Many times the judge will order the IRS to repay any interest and penalties, but the taxpayer can still try to appeal to the same three judges who may uphold the original verdict.
The IRS can also elect to go to trial. This would mean a hearing before one of three judges, known as an “in camera” proceeding. The taxpayer and tax professional would present their cases, and the judge would decide based on legal standards. If there are substantial issues, the judge may require the taxpayer to post bond, request expert witnesses, and even issue a temporary restraining order. The IRS tax professional may also request the case be heard by the Supreme Court. The tax professional would be out of a job if the Supreme Court ordered the IRS to repay interest and penalties.