The United States federal tax system is perhaps one of the most complicated, ever-evolving systems in the country. The State of Nevada, of course,
has its own tax system. Both have ramifications for individuals and businesses. With that comes extreme complexity, yielding plenty of room
for tax controversies. The attorneys at JEFFREY BURR navigate these complexities every day, helping clients with very important issues to best
possible outcomes. Tax controversy and resolution involve a number of topics. Here are some of the most common, all described in this section.
IRS Audits – The IRS has a significant amount of power to inspect the books and records of taxpayers to determine and assess tax liabilities.
The IRS auditor represents the government, and it is their job to propose additional assessments of tax and potentially penalties.
No matter how friendly they appear to be, the auditor is neither neutral nor in your corner.
Types of IRS Audits
Typically, an audit begins when a taxpayer receives a notice from the IRS that they have been selected for an audit. There are different
types of audits, including: correspondence audits, office audits, and field audits. In a field audit, the auditor will typically send
an information document request to the taxpayer. These document request forms can be exhaustive and can request, among other things,
the following items:
The general ledger.
Receipts and invoices to substantiate deductions.
The tax attorneys at JEFFREY BURR have represented hundreds of taxpayers before IRS auditors. Contact us today to see how we can help you.
Offer in Compromise - If you are unable to pay your total tax liability, you may be able to settle your tax debt for less than the total
amount that you owe to the IRS. The IRS allows taxpayers to submit an Offer in Compromise to settle their tax debts. The tax attorneys
at JEFFREY BURR have helped their clients save tens of millions of dollars in taxes through successful offers in compromise.
You may qualify based on an analysis of your income and the equity in your assets, which is used to calculate the reasonable collection
potential (RCP). An Offer in Compromise will stop all IRS collection actions such as an IRS levy or wage garnishment.
There are three (3) grounds on which your IRS Offer in Compromise can be accepted:
Doubt as to Liability: A compromise under this option qualifies only when there is a genuine dispute as to the existence or amount
of the correct tax debt under the law. Under this method of compromise, you are able to contest the underlying merits of the tax
Doubt as to Collectability: An Offer in Compromise may be accepted if there is doubt that the amount owed is fully collectible. Doubt
as to collectability exists in any case where the taxpayer’s assets and income are less than the full amount of the tax liability.
Effective Tax Administration: Offers in compromise may be accepted based on effective tax administration (ETA). An offer may be accepted
based on ETA when there is no doubt that the tax is legally owed and that the full amount owed can be collected, but requiring
payment in full would either create an economic hardship or would be unfair and inequitable because of exceptional circumstances.
A wage levy will force your employer to turn over some portion (in some cases three-fourths) of your wages to the IRS. A tax lien against
your property will make it very difficult to sell your home or to refinance it. The IRS can seize other assets as well, including
bank accounts, cars, boats and other valuable property.
If you have received a notice from the IRS that your wages or bank accounts will be levied, time is of the essence. Prompt involvement
by an experienced tax attorney can almost always prevent a tax levy or significantly reduce the amount levied.
You have 30 days to appeal the final notice of intent to levy. Typically, the IRS notice of intent to levy is a Letter 1058 or LT11.
If you have received one of these notices, we can help you:
Prevent the IRS from seizing your bank accounts.
Keep the IRS from seizing your property and home.
Obtain the return of recently seized property.
Stop the IRS from garnishing your wages or the income from your business.
Contact a tax attorney at our Las Vegas, Nevada,
law firm. We can negotiate with the IRS on your behalf.
Taxpayers unable to resolve their tax matters with IRS auditors have the option to litigate their case in a number of federal courts,
each with different requirements and attributes. The available forums are the United States Tax Court, the United States District
Courts, the United States Bankruptcy Court and the United States Court of Claims. Individual taxpayers rarely use the United States
Court of Claims.
The Las Vegas area tax attorneys of JEFFREY BURR assist individuals and businesses in Nevada and elsewhere with tax litigation, settlements and appeals.
United States Tax Court
Generally, most tax issues are presented in the United States Tax Court because it is a prepayment forum, meaning that taxpayers can
initiate a tax case before paying the tax liability. A case generally begins after the taxpayer has received a Notice of Deficiency
from the IRS and the taxpayer petitions the court. Taxpayers must do so within 90 days (150 days if the taxpayer is not a resident
of the U.S.) of the IRS mailing date on the deficiency notice. The court may also hear cases primarily involving collection actions
(liens and levies) and IRS denials of taxpayer requests for innocent spouse relief, offers in compromise, penalty abatements or
other collection alternatives. These cases can be commenced after the taxpayer has exhausted all IRS Appeal rights and has received
a Notice of Determination.
Unlike other forums, Tax Court judges have special expertise in federal tax laws and are employed to interpret tax laws and regulations
to ensure that taxpayers are taxed fairly by the IRS. Trials are conducted before one judge and without a jury.
Often, U.S. Tax Court cases are settled by mutual agreement between the taxpayer and the IRS Appeals Officer or IRS attorneys prior
to trial. If a trial is conducted, the judge will issue a report setting forth both findings of fact and an opinion. Decisions
of the Tax Court can be appealed to the United States Court of Appeals so long as the case is not designated by the taxpayer to
be a small Tax Court case.
United States District Court
Unlike the U.S. Tax Court, the U.S. District Court is not a prepayment forum, meaning that taxpayers must first pay the disputed amount
and then request a refund from the IRS. After receiving a denial of the taxpayer’s refund request and exhausting IRS administrative
remedies, the taxpayer can then file a suit in the U.S. District Court. Unlike the U.S. Tax Court, taxpayers are then entitled
to a jury trial. While there is no minimum amount of disputed tax to file suit in the U.S. District Court, the cost and complexity
of a federal District Court often limit U.S. District Court tax actions to large cases.
United States Bankruptcy Court
The remedies available to a taxpayer in Bankruptcy Court vary depending on whether the taxpayer’s case is a Chapter 7, Chapter 11 or
Chapter 13 case. Courts can, however, decide a number of disputes between the IRS and the taxpayer. More specifically, the courts
often determine the amount or validity of a deficiency claim or tax liens, and the taxpayer’s right to a discharge of tax liabilities
asserted by the IRS. As with the U.S. Tax Court, actions in the Bankruptcy Court can commence prior to making payment of the liability.
We welcome you to contact the tax attorneys at JEFFREY BURR with regard
to a tax litigation matter. With Nevada offices in Las Vegas and Henderson, we serve clients throughout the State, as well as those
located throughout the country.
We have a wide-ranging understanding of the rules and the process of helping innocent spouses obtain relief from tax liability. If
you filed a joint return, but were unaware that your spouse had misrepresented information in the return, or that information was
incorrect on the return, we can help you seek relief from the resulting obligation.
To fully benefit from the innocent spouse relief provisions in the Internal Revenue Code, it is critical that you contact a tax attorney as soon as you receive notice from the IRS. There are
specific time limits for raising the defense; failure to act in a timely manner could jeopardize your chances to get the protection
At JEFFREY BURR, our tax attorneys have helped dozens of innocent spouses obtain relief from millions of dollars in taxes and penalties.
Our extensive experience gives us a comprehensive understanding of the procedures involved in innocent spouse relief proceedings,
as well as the different levels of appeal. We know how the system works and use it to get the best possible outcome for our clients.
Contact us today to see how we can help you.
The IRS may file a lien or levy against a business or individual based upon a tax liability of a different entity via the alter ego or
successor liability theories. If the IRS has threatened to assert a tax liability against your business based on alter ego or successor
liability theories, we can offer expert guidance to protect your peace of mind and livelihood.
Alter Ego – The IRS may attempt to collect a tax liability from the taxpayer’s “alter ego.” In an alter ego situation, there can be such
a unity of ownership and interest between the taxpayer and a different entity such that the entity is not considered a genuine, separate
entity. An alter ego is an entity that is legally distinct from the taxpayer, but is so intermixed with the taxpayer that their affairs
(and assets) are not readily separable. As a result, the IRS can seek to assert that the new entity should be considered the same as
the old entity or taxpayer for collection purposes. The IRS could attempt to consider all of the assets owned by the alter ego as a
source from which to collect the taxpayer’s tax liability. The IRS is generally required to seek Area Counsel approval before instituting
administrative collection actions against the alter ego.
Successor Liability - Generally, a corporation that acquires the assets of another corporation is not liable for the debts of the transferor
corporation. However, this general rule is subject to certain exceptions. When the surviving corporation is the result of a formal
merger or consolidation of two corporations, many state corporate merger and consolidation statutes state that a surviving corporation
is liable for the debts of a predecessor corporation. In these cases, the surviving corporation can be held liable for the tax debts
of the predecessor corporation as a successor in interest. Successor liability may apply in the following circumstances:
when the successor expressly assumes the liabilities;
when the transaction amounts to a de facto merger;
when the successor is a mere continuation of the seller corporation; and
when the transaction is entered into fraudulently to escape liability.
Under the successor liability theory, a taxpayer’s liability may be collected from the successor in interest via lien and levy or installment
agreement using administrative collection procedures. The IRS might also request that the successor establish an installment agreement
to make monthly payments toward the prior entity’s tax liability. The successor corporation steps into the shoes of the transferor
corporation and has all of the rights and remedies that the transferor corporation held. A new notice of federal tax lien against the
successor naming the successor corporation might be filed by the IRS to preserve its priority over other creditors. In these circumstances
the taxpayer can request an appeal to prevent the successor theory.
The ten-year statute of limitations for collection under IRC § 6502 for the original corporation’s tax liability applies to the successor
corporation. If it appears that successor liability may apply, the IRS must consult Area Counsel for approval before taking any collection
action against the alleged successor corporation. It is important to contact a tax attorney to discuss your appeal options if you disagree with the liability.
The Department of Taxation has increased its audit and enforcement efforts involving State sales and use taxes and modified business
taxes. If you or your business have outstanding State taxes, the Nevada Department of Taxation has unique tax procedures similar
to IRS that allow taxpayers to resolve tax debts, such as Offers in Compromise and Installment Agreements.
The tax attorneys at JEFFREY BURR have extensive experience in dealing with the Nevada Department of Taxation with all facets of State
taxes, including Modified Business Taxes, Sales and Use Taxes and the recently enacted Commerce Tax.
The Nevada Department of Taxation has the power to shut down your business and can use all kinds of techniques to force payment. Whatever
your State tax issue, our firm is trained in the distinctions of Nevada State tax law and can help guide you through the process.
Contact the tax attorneys at JEFFREY BURR if your business is
facing a Nevada sales and use tax audit or has an outstanding balance due to the Nevada Department of Taxation.
An installment agreement is a payment arrangement whereby the IRS allows a taxpayer to pay their tax debt over a period of time by
way of a monthly payment. When a payment plan is established, the IRS will not take any further collection action, such as wage
garnishment or seizure of bank accounts.
The taxpayer must be current with all past tax returns before beginning an installment agreement. Penalties and interest do continue
to accrue until the full balance is paid, however. Also, a tax lien may be filed as part of the terms of the installment agreement,
depending on the amount of the total tax debt. To find out more about this option to pay your IRS tax debt, contact the tax attorneys at JEFFREY BURR today.
It often occurs when a taxpayer attempts to establish an installment agreement on their own, that the IRS wants to collect the taxes
as fast as they can. In many cases, the unrepresented taxpayer finds themselves in an installment agreement that is too burdensome.
This, in turn, often leads to a default of the installment agreement and the beginning again of the collection machine. Therefore,
it is critical to have an affordable agreement established properly from the very beginning.
If you cannot afford to make monthly payments and do not qualify for any other type of relief, such as an Offer in Compromise, we may
negotiate to have your account placed in a Currently Not Collectible (CNC) status. Under CNC status, you will not have to make
any payments and there will not be any type of collection action unless there is a material change in your financial circumstances.
If you fail to pay your back taxes, it can result in IRS penalties and interest that can compound over years and make your tax debt
substantially larger than it initially was. Non-payment of this debt can then result in even more IRS penalties and interest, a
levy on your wages or bank account, a lien against your property, or even a seizure of your assets. IRS Penalties can be applied
for filing your tax return late or for paying your due tax late.
The IRS penalty for filing late is generally 5% each month, or partial month, and can be up to 25% of the amount due on your tax return.
There are some situations and circumstances in which you can have your IRS penalties abated or eradicated either partially or in
full for one tax year or multiple tax years. To submit this Penalty Abatement request to the IRS, a taxpayer must have reasonable
cause that is specific for each year and must be able to explain why the penalties should be removed.
Besides an Offer in Compromise, the IRS offers an alternative program for reducing delinquent tax debt. Clients seeking tax relief
from their tax liability can still be helped. The tax attorneys at JEFFREY BURR can work with you and make payment arrangements
that the IRS will allow. If there were circumstances beyond your control that prevented you from paying your tax debt and led to
delinquency, we are able to challenge the penalties (Penalty Abatement) that have built up by preparing and filing a Form 843 Penalty
Relief from penalties falls into four separate categories:
Reasonable Cause – mistake made by the taxpayer, ignorance of law, death, serious illness, unavoidable absence or divorce.
Statutory Exceptions – simple or complex legislative tax code changes.
Administrative Waivers – undue hardship, fire, flood, natural disaster, bad legal/tax advice, and first-time waiver.
Correction of Service Error – mistakes made by the IRS.
If an Offer in Compromise is not the best solution in resolving your tax debt, a Penalty Abatement may be a possible alternative.
At the Las Vegas, NV Law Firm of Jeffrey Burr, we represent clients throughout Southern Nevada, including Overton, Logandale, Mountain's Edge, Henderson, Aliante, Boulder City, North Las Vegas, Mesquite, Pahrump, Summerlin, Southern Highlands, Green Valley, Laughlin, Clark County, Nye County and Lincoln County.