If you’ve ever failed to file your tax returns, failed to pay your taxes when due, or simply made a mistake with your tax documents, you may be facing legal action against the IRS. If that’s the case, you’ll want an experienced IRS litigation attorney, like Steve Thienel on your side. From staying up-to-date on the ever-changing tax code to deep experience in all facets of tax litigation, Thienel Law is capable of taking on the most challenging cases and delivering results. Whether you are seeking consultation over a pending audit, or need an attorney to represent you in tax court, Thienel Law is prepared.
Generally, IRS litigation for unpaid taxes begins with a federal inquiry or formal audit of an individual or corporation’s taxes.
From that point, the Internal Revenue Service will audit the tax returns for a year or, more frequently, several years. After the audit is complete, the IRS will notify the taxpayer or tax-paying business whether they are delinquent on any taxes. At this point, the taxpayer will have the opportunity to appeal the audit. Importantly, the taxpayer will only have 30 days to request that the IRS Appeals Office review the audit.
After the audit is complete, if the IRS still believes there are delinquent taxes owed then the taxpayer may have several options. It is during this administrative stage that most tax controversies are resolved. IRS litigation attorney Steve Thienel can help any delinquent taxpayer explore their options at this point.
A common option at this point can include a compromise, where the IRS and your tax attorney will look at the taxpayer’s ability to pay, income, expenses and asset equity. If a taxpayer chooses to go this route then it is important that he or she has an attorney with expertise in this subject area to ensure the compromise results in the lowest possible tax burden for him or herself.
Another popular option, for taxpayers that are unable to pay in full, is the option to pay over time. The IRS has a streamlined process for obtaining an installment agreement for individuals or businesses that owe less than $50,000 in delinquent taxes. The taxpayer may choose to make a monthly payment on this tax debt in the form of an automatic debit payment for up to 72 months. According to the IRS, if the debt is greater than $50,000 or a period longer than six years is required to pay off the debt, then the federal agency may still be able to accommodate if more forms detailing the taxpayer’s financial information are submitted to it.
The IRS can also act unilaterally to recoup the taxes owed. The government agency can impose a federal tax lien or garnish wages, among other enforcement actions. In more serious cases, it may seize bank accounts and other assets from a delinquent taxpayer.
When involved early in the process, Thienel Law can help you proactively fend off a pending court case. Tax disputes are routinely resolved through an IRS audit, or an IRS appeal.
After exhausting all administrative remedies for the tax dispute, a taxpayer must then decide whether to either pay the disputed tax amount or litigate the controversy through the court system. Understandably, most taxpayers are overwhelmed and confused about their next step. The tax attorney at Thienel Law possesses the knowledge and experience to assist any taxpayer with this decision and ensure that he or she is able to choose the best option for his or her own unique circumstances.
If a taxpayer does choose to pursue IRS litigation then Thienel Law will be able to effectively advocate and utilize the law to ensure the best results for its clients. While this not only includes effective advocacy in the courtroom, the seemingly minor aspects of a IRS litigation controversy can also have an impact on the case.
For example, a taxpayer can choose to petition three different court systems when seeking to resolve the tax controversy. Called “Forum Selection” by attorneys, the taxpayer can petition the United States Tax Court, the United States District Courts, and the United States Court of Federal Claims.
- The United States Tax Court consists of 19 judges, all appointed by the President. The judges travel to different federal courthouses throughout the country and exclusively hear and resolve tax-related controversies.
- The United States District Courts are the “all-purpose” courts in the federal system and handle both civil and criminal cases. Importantly, this is the only court where a taxpayer has the right to demand a jury trial.
- The United States Court of Federal Claims is a federal court system that has jurisdiction over all claims against the federal government. Because a tax controversy necessarily involves a federal government agency, this court has jurisdiction to hear all disputes involving the Internal Revenue Service.
The forum can be a very consequential choice for the taxpayer. Choosing the right forum can depend on whether the taxpayer has disputed the tax prior to filing the lawsuit – such as in an administrative hearing, whether the taxpayer wants to litigate their case in front of a judge or jury, and the precedence that each court may have on a particular issue. In short, this seemingly innocuous choice can actually be very consequential.
Once the forum is chosen, Steve Thienel will assist his clients every step of the way. From the discovery phase where the attorney is gathering information to any possible appeals, Mr. Thienel will make sure his clients are always aware of their options every step of the way to always ensure the best possible results.
In more serious cases, the Internal Revenue Service may instigate a criminal investigation against a taxpayer it believes is fraudulently, or otherwise, illegally not paying his or her taxes.
The IRS understands the complexity of the tax code and therefore, does not prosecute against delinquent taxpayers who have made an honest mistake. A civil tax matter becomes a criminal matter when the Internal Revenue Service believes that the taxpayer has not made a mistake, but instead has willfully evaded complying with the tax code.
When determining whether an unlawful taxpayer has behaved recklessly or maliciously, the federal agency looks at several determining factors:
- Whether any documents were falsified
- Claiming a dependent that does not exist
- Whether any income or assets were actively concealed
- If there are multiple sets of financial records
- If personal expenses have been marked as business expenses
- Using a fraudulent social security number or tax identification number
In many cases, this can involve individuals with foreign bank accounts. Over the last decade, as more foreign governments and foreign banks have begun handing over account information, the number of criminal investigations launched by the Internal Revenue Service has seen a marked increase.
Tax crimes can be charged against people other than the actual taxpayer. If a business is delinquent on taxes, the federal government may go after any business partners or corporate officers that, knowingly or unknowingly, may have helped perpetuate the crime. Similar, fiduciaries of a trust fund can also be criminally liable for tax evasion.
Common tax problems that can result in criminal charges include:
- Intentionally evades taxes
- Intentionally fails to file a tax return every year
- Intentionally fails to fully report all income received during a year.
- Makes fraudulent or false claims on a tax return or to an IRS agent.
- Assists, Prepares, or files a false or fraudulent tax return.
Notably, the line between a civil infraction and a criminal infraction with the Internal Revenue Service centers around whether a person willfully violated the tax code. Basically, if a person is reckless or negligent in filing their taxes then it will only be a civil infraction. If the person was attempting to defraud the government, then the IRS will seek criminal charges.
A conviction for income tax fraud is very serious and the penalties are steep.
- Attempting to evade or defeat paying taxes is a felony conviction that can result in up to five years of imprisonment and a fine of up to $250,000. If it was a corporation evading taxes then the fine can reach up to $500,000.
- A conviction for making false or fraudulent statements can result in imprisonment of up to three years, and a fine of either $250,000 or $500,000, depending on whether the taxpayer was an individual or a corporation.
- Failing to file on time, failure to pay on time, or failure to supply the IRS required information can result in imprisonment of up to one year and a fine of up to $100,000 or $200,000, again depending on whether the taxpayer is an individual or a corporation.
Experience You Can Trust
Whether have just been notified of an IRS audit or you are facing criminal charges, Thienel Law has the expertise and experience to guide you through all aspects of tax disputes and, if necessary, tax litigation.