Benefits Of Hiring An Income Tax Lawyer
While most taxpayers are able to handle their personal income taxes with little difficulty, there are many occasions when an Income tax lawyer can be a valuable resource or a necessary partner. The IRS and California Franchise Tax Board (FTB), can be quite aggressive when rules aren’t followed, even if taxpayers do their best.
Sometimes taxpayers make mistakes and find it difficult to correct them. Sometimes they ignore the error and make it worse. There are also those who depend on a CPA to get them out of trouble. This is not a good idea when dealing with the IRS and FTB in cases that could end up in litigation. We’ll be discussing the differences between FTB and IRS, as well as why you might need to have a tax attorney and when it is best to hire one.
The IRS Vs The FTB
Both government organizations administer the income tax code. The IRS handles federal taxes while the Franchise Tax Board handles state taxes in California. The FTB has fewer resources so it will be able to piggyback on the IRS audit results but concentrate on areas where taxpayer error is greater.
- Capital gains and losses transactions
- 1031 Exchanges
The FTB is more aggressive in its collection efforts than the IRS. The FTB will also use information that is not available to the IRS, such as:
- Department of Motor Vehicles
- Property tax records
- Additional state-specific disclosures
FTB requires more disclosures of sensitive financial data than the IRS. Due to the higher levels of administration, the FTB has to meet more deadlines and is, therefore, slower to resolve problems. Who would have thought that a state agency could be more efficient than the federal government in bureaucracy? There are more obstacles to overcome. A California state tax settlement approval can take up to a year.
Main Reasons To Hire An Income Tax Lawyer
The attorney-client privilege is one of the best reasons to hire an Income tax lawyer instead of a CPA. You cannot ask your tax attorney to testify against you in court proceedings. This exemption cannot be provided by a CPA or a tax preparer. Another reason to hire a professional tax attorney is to get the best advice in making the right decisions. Tax attorneys have the expertise to reach a tax settlement. This is not something that the average person does every day. Only an Income tax lawyer who is knowledgeable about the various programs available can tell you which ones are best for you.
While a CPA may have some familiarity with certain programs, they will not be able to understand all of the details. The tax code and tax laws are complicated and change every year. The wrong advice could cost you dearly if you’re involved in FTB or IRS collections. This is why speaking to an IRS tax attorney is the best option.
When Is It A Good Idea To Hire An Attorney?
The following situations are a good place to start if you need a tax attorney.
- Calculating your self-employment and business taxes
- You have high tax liabilities or assets that require special protection
- You cannot correct a mistake if the IRS ignores you
Taxes on self-employment and business add complexity to the typical income tax process. Tax attorneys can help you navigate confusing IRS documents. There are nearly 2000 IRS publications and forms to go through. Many of them are not written in plain English. Taxes are different for businesses and individuals. This is why many taxpayers find themselves in trouble. Tax attorneys can help you reduce your tax bill in the future. Your case may be transferred to the Large Dollar Unit for collection if you owe more than $100,000 to the IRS. This unit has the most experienced agents working for it; they are aggressive and they close cases fast.
An experienced tax attorney can help you keep track of them and protect your businesses. A lawyer is essential if you are facing potential criminal charges.
Unless taxpayers have the cash to hand over, the IRS isn’t known for being responsive to taxpayers. A tax attorney can help you draft a letter to get attention from the IRS and FTB if they ignore your letters. Income tax lawyers are often able to settle disputes over the telephone because they have direct contact information with the agencies. It is time to examine times when a tax attorney can be a valuable asset to your financial well-being.
You should immediately hire an attorney if you are notified about an audit. While most disputes involve one or more tax returns, there are still some instances when you might say or do something to cause the investigation to be canceled.
An attorney can:
- Talk to the tax agency in your place
- Be present during an audit
- Help negotiate a settlement
- Be sure to not pay too much
You could face criminal or tax evasion charges if you ignore tax agency notifications. If you are charged, a lawyer can help you defend yourself or avoid you being charged.
An attorney can help you prepare an Offer in Compromise. This will increase the likelihood that the tax agency will accept it. To be accepted, there are many steps to take.
- The full amount is not possible to pay at once or in equal installments.
- The amount of liability is not clear.
- If exceptional circumstances exist, payment in full would result in extreme financial hardship, be unfair, or be inequitable.
It can take up to two years for the IRS to accept or reject your Offer In Compromise. It should be convincing.
Tax Fraud Or Tax Evasion Charges
We now move on to criminal territory. In these cases, a lawyer is crucial. These charges can be brought against anyone who:
- Refuse to File Tax Returns
- Be responsible for their taxes
- All their income sources
There are penalties for tax fraud or evasion:
- Interest on the tax owed
- Prosecution fees
- Public humiliation
Tax agents may knock on your door asking questions. Anything you say could be used against you.
Eliminating Tax Liens and Levies
FTB and the IRS can place levies and IRS liens on your personal or real property to secure your tax debt payments. A tax attorney with experience can help you negotiate installment payments plans, offers in compromise, and other options to reduce your tax liability. FTB and the IRS can make mistakes. A tax attorney can help prove that you were wrongly placed a lien. In many cases, an Income tax lawyer may be required. The tax laws and codes at both the federal and state levels are too complex for laypeople. They also change too frequently for tax professionals to keep up.
Hire a tax attorney to assist you, whether you need help with your tax returns for business or if you need criminal tax defense.
Choose Tenina Law To Be Your Income Tax Attorney
We are Southern California’s top tax attorney. Tenina law has been in operation for over 20 years. We are tax law specialists and have managed many IRS negotiations. We can assist you, whether you are a business owner or someone seeking immediate assistance with tax questions. As long as there is a tax problem, penalties and interest will continue to accrue.
Our team is available to help you quickly get the tax assistance you require. We are open and transparent so that you can get the information you need to solve your tax problem. We want you to be able quickly and efficiently to get the answers you need to solve your tax problems.
Tenina Law Provides Services
The offices of Tenina Law will provide you with a tax attorney to assist with:
- Non Filed Returns
- Asset Or Property Seizure
- Criminal Tax Defense
- Wage Garnishment
- Installment Agreement
- Levies and IRS Liens
- Penalties and Interest
Other Areas We Operate
Our team is based in Southern California and the surrounding area. We can help you with tax resolution and work with all Californians. Some of the main areas we serve include: