An IRS lawyer recently opened a huge window into the often secretive practices of one of our nation’s largest tax collection agencies, warning 10 U.S. Senators in a letter that the Internal Revenue Service routinely flouts legal rules in two out of the agency’s New York branches. The problem? The head of the IRS, which is currently facing investigations for potential criminal behavior involving the bulk collection of non-profit organizations’ tax-deductible donations, apparently does not even know what an IRS rule is.
The latest example of this bureaucratic nightmare is a matter of potentially dangerous litigation strategy known as “targeted taxes.” In its most extreme form, the IRS can ask a taxpayer to bring suit against a non-profit organization because one or more of its leaders wrote an email criticizing the tax agency’s policies and asking that the IRS be brought to trial over the case. The IRS will simply pretend that such a proceeding is legal, but in reality it is not. The lawyers for the non-profit would be wise to contact a Denver IRS Lawyer immediately, so that any pending litigation can be immediately stopped and a resolution sought.
Other examples of actions that IRS managers believe they should not make are ordering an audit of a small business solely on suspicion that a certain employee may have engaged in accounting fraud, instructing employees to search for evidence of tax liability using a taxpayer’s social security number, or demanding that a taxpayer produce all of his financial information without first getting a signed waiver. These and other actions violate what is known as the IRS Code. A tax lawyer experienced with IRS cases can inform the taxpayer that these actions are illegal, that they constitute criminal acts under the law, and that he has a strong argument for tax relief based on the fact that he did not break the law. He can also tell the taxpayer that due process has been provided for him to protect his rights and that there is a good chance that his tax liability will be reduced if he settles the matter.
One situation where a tax lawyer may be useful is when an audit is being handled by a judge. In this instance, the taxpayer needs a knowledgeable tax professional who can explain how the audit is related to the law and which laws are being violated. This is important because the judge often rules on a case by ruling on what is legally wrong, rather than on what the taxpayer did. The IRS audit can easily become a way for the IRS to bully the taxpayer into settling. If an attorney is not involved in the initial stages of the audit, then the IRS can simply use the audit as leverage to get more money from the taxpayer.
What does all this mean to you? Hiring a knowledgeable IRS lawyer means that the IRS is not likely to find a way to get more money out of you. You may still owe the money, but a competent lawyer will work with you to try and get the best possible settlement. He will know all the latest IRS news, and will be able to tell whether or not your rights have been violated. And, if you are unable to settle for anainer from the federal courts, then the IRS will have the opportunity to petition the court to force you to repay the money.
Of course, there are times when the IRS will actually succeed in getting a settlement that is much bigger than what they were seeking in the first place. In these instances, it is usually better to go to trial. The main reason for this is that with a trial, the IRS will be on trial for the breach of the tax code, which means they have more leverage over you. A competent lawyer will know exactly which legal actions to take in order to make the most out of a settlement in this type of case.