Criminal Tax – Plea Negotiations
My client was a government employee who embezzled approximately $6,700,000 from the county in which he worked. Those funds were not reported as income on his federal or state income tax returns. This resulted in federal and state criminal investigations, in which my client pled guilty. The federal Sentencing Guidelines range was a period of incarceration for 63 to 78 months. The Department of Justice sought a term of imprisonment of 60 months, while our office requested 36 months. The Court sentenced our client to 48 months, to run concurrently with any sentence imposed by the state, which was well under the guidelines range. This case received extensive coverage in the media.
IRS Examination, Criminal Declination, and Offer in Compromise
A restaurant owner was audited by the IRS. The owner was represented by his CPA. During the course of the audit, the IRS Revenue Agent determined that the owner’s conduct was criminal, and she referred to the case to IRS Criminal Investigation. My office was then engaged. We worked with the IRS Special Agent, who ultimately determined to issue a Declination Letter, thereby returning the case to the civil examination. An examination report was issued, proposing a total individual income tax liability of approximately $8.3 million, $1.7 million of which was civil fraud penalties. Our office appealed the civil fraud penalties, and during the appeal hearing, the IRS Appeals Officer agreed to concede those penalties. Later, our office filed an Offer in Compromise with the IRS for both the individual and corporate tax assessments, and the IRS accepted a settlement of $180,215 to resolve the multi-million dollar liability account.
Injunction Suit Against Tax Return Preparer
My client owns and operates a tax preparation business. The Department of Justice (“DOJ”) sought an injunction against my client, arguing that his business was filing inaccurate returns. According to the DOJ’s Complaint, the estimated tax loss caused by these incorrect returns totaled $75,000,000. My office was able to broker a settlement that permitted my client to continue to operate his business, as long as he agreed to a temporary period of monitoring by the third-party CPA.
Offer in Compromise
A non-profit organization that provides fee legal services to survivors of domestic and sexual violence owed the IRS approximately $600,000, mostly from unpaid payroll taxes. The IRS was aggressively pursuing this liabilities, when my office filed an Offer in Compromise (“OIC”). The IRS Offer Examiner rejected the OIC, and my office filed an administrative appeal. We were able to negotiate a settlement of approximately $36,000 in Appeals.
Trust Fund Recovery Penalty
My client was a physical therapist who was assessed a substantial trust fund recovery penalty (over $450,000) for due to an interest he had in a physical therapy clinic that failed to pay its payroll taxes. My office filed an administrative refund claim to dispute the assessments. Our claim was approved within a year, and the IRS agreed to abate the assessment in full.
My clients, a husband and wife, were represented by their CPA for an IRS income tax examination. The IRS proposed an assessment of over $1.3 million, primarily due to adjustments to activity in a partnership in which they had a majority interest. That assessment included accuracy-related penalties of almost $150,000. My office was engaged after the statutory notice of deficiency was issued. We filed a petition in the United States Tax Court, and the case was then transferred to IRS Appeals for pre-trial settlement negotiations. We were able to prove the IRS’ adjustments to the partnership’s financial activities were erroneous. Ultimately, we were able to work out a resolution in Appeals, where the assessments for 2 of the 3 years decreased to approximately $70,000, and my clients were entitled to a refund of about $86,000 for the third year. All accuracy-related penalties were waived.
Offer in Compromise
A home improvement company owed the IRS approximately $1,000,000. The Offer in Compromise submitted by its accounting firm was rejected, as the IRS determined the liability could be paid in full. I represented the company at the administrative appeals level and negotiated a settlement of $450,000 to be paid in installments over a twelve-month period.
A client that owed the IRS approximately $150,000,000 (one hundred and fifty million dollars) was granted an installment agreement of $100 (one hundred dollars) per month.
U.S. Tax Court Litigation – IRS Abuse of Discretion
On behalf of a corporate client, I filed a Collection Due Process appeal, which was assigned to a Settlement Officer within the IRS Appeals Division. After a contentious administrative hearing, the appeal was rejected and the Settlement Officer determined that levy and seizure action were appropriate. This would have immediately caused the company to go out of business. I filed a petition in the United States Tax Court alleging that the Settlement Officer had failed to consider the case as required by the Internal Revenue Code and Treasury Regulations. The IRS Area Counsel Attorney agreed with my position and informed the Tax Court that the case had been improperly handled by the Appeals Division. Levy and seizure action were not taken and the case was remanded to Appeals for the review required by law.
My clients were charged with laundering narcotics proceeds and structuring transactions to avoid their reporting to the IRS. Under the federal sentencing guidelines, they faced a maximum prison sentence of twelve years. After extensive negotiations with the U.S. Attorney’s Office, they were sentenced to serve one day in jail and a period of supervised release. A $2.4 million forfeiture order was settled for $100,000.
Offer in Compromise
A chiropractor’s Offer in Compromise based on doubt as to collectibility was rejected after the IRS determined that the tax liability of $850,000 could be paid in full. The case was appealed and the IRS accepted an offer of $350,000.
Following an audit, the IRS refused to recognize a “like-kind” exchange. On the eve of trial in the U.S. Tax Court, the IRS conceded the case. The savings realized by the client was approximately $1.2 million.
U.S. Tax Court Settlement
A client deducted tuition paid to Harvard Business School as a business expense. Prior to trial, the IRS conceded, based on the government’s litigation hazards, that 75% of the tuition was, in fact, a bona fide business expense.
Unlawful Seizure of Real Property
The IRS seized and sold a family’s farm and home in the Dallas, Texas area. I obtained a temporary restraining order (“TRO”) from the U.S. District Court and then represented the taxpayers at trial. The Court, after considering the post-trial briefs, ruled that the taxpayers were entitled to recover their property. This case was reported on extensively by a national television network affiliate in Dallas, Texas.
Disallowed Business Expenses
Following an audit handled by another firm, a prominent physician received a notice indicating that he would be assessed an additional $240,000 in taxes, penalties, and interest-based on expenses of his medical practice that the IRS Revenue Agent disallowed. After filing a petition in U.S. Tax Court, I represented the client before the Appeals Division of the IRS and negotiated a settlement resulting in a revised liability of $45,000.
Trust Fund Recovery Penalty Litigation
The CEO of a government contractor was assessed a Trust Fund Recovery Penalty due, primarily, to the malfeasance of an accountant hired to oversee the company’s financial and tax operations. This case involved extensive pre-trial discovery, which included depositions in three states. The U.S. District Court denied the government’s motion for summary judgment. Thereafter, the U.S. Department of Justice agreed to settle the case on reasonable terms. The savings to my client exceeded $400,000.
Levy Action Against Government Contractor
A successful and growing government contractor had all of its accounts receivables attached by an IRS Revenue Officer. After the filing of a collection appeal and numerous conferences with the Revenue Officer and his manager, all levies were released and my client was given a reasonable period of time to address the tax situation. Had the levies remained in place, the business would have been forced to cease operations.
Criminal Tax – Plea Negotiations
My client was referred to the Department of Justice for criminal prosecution for certain tax felonies. I negotiated an agreement with the U.S. Attorney’s Office, which allowed him to plead guilty only to misdemeanor tax charges. My client then served a period of home detention, which enabled him to continue working in the IT industry.
U.S. Tax Court Trial – Worker Classification
The IRS challenged my client’s claim that he was an independent contractor and not an employee. This resulted in a proposed tax assessment of approximately $160,000. I tried the case in U.S. Tax Court, after which the IRS offered a full concession.
An interest abatement claim was filed based on the failure of an IRS Appeals Officer to resolve certain partnership issues over a nine-year period. Ultimately, the IRS agreed to abate a significant percentage of the interest that accrued during this time with the aggregate savings to the clients involved being in excess of $400,000.
My client’s former wife had embezzled large sums of money from her employer. At the administrative level, the IRS took the position that my client received the benefit of the embezzled funds and knew, or should have known, that his wife was a thief. Prior to the scheduled trial, the IRS conceded the case and agreed that my client should be relieved of any obligation to pay tax on the ill-gotten funds.
My clients, a husband and wife, owed the IRS approximately $210,000. A tax lien had been issued by the IRS. My clients put their home on the market, and found a buyer. I was informed about the sale approximately 3 weeks prior to the settlement. My office filed a lien discharge application, and 4 days later, received a conditional commitment to discharge the property from the lien for less than the lien amount.
My clients, a husband and wife, owed the IRS over $3.6 million in income taxes. The husband was incarcerated, and the wife had limited liquid assets. Our office filed innocent spouse relief for the wife. The claim was rejected by the Innocent Spouse Unit and IRS Appeals. We filed for relief in Tax Court, and after engaging in extensive pre-trial negotiations with IRS Counsel, the IRS agreed to concede the case. Full innocent spouse relief was granted to my client.
My client owed approximately $22,000 in late filing and payment penalties to the IRS at the time she passed away. Her tax issues were related to medical conditions. After she passed away, my office filed a request for penalty abatement due to reasonable cause to ease the financial burden on her children. The IRS denied our claim, and an appeal was filed. After a hearing with Appeals Officer, and some follow-up negotiations, the IRS agreed to grant our penalty abatement request in full.
Trust Fund Recovery Penalty & Attorney Fees
The IRS proposed a trust fund recovery penalty assessment against my client in the amount of approximately $700,000. My office appealed the assessment, and IRS Appeals did not sustain the proposed assessment. Years later, the IRS seized my client’s income tax refund and applied it to the trust fund recovery penalty balance that had not been assessed against him. My office ensured those funds were returned to my client. We then submitted a claim for attorney fees that my client incurred in recovering the erroneously intercepted funds. In addition to being awarded legal fees for recovery of the refund, he was also awarded the fees for the attorney fees claim.
Offer in Compromise
My client owed federal back-taxes of almost $950,000, from prior Trust Fund Recovery Penalty assessments. That business had terminated its operations, and my client was an employee of another company. My office filed an Offer in Compromise and was able to settle his federal tax debt for approximately $25,000.
MD State Tax Assessment Against Non-Resident
The Comptroller of Maryland filed tax liens against my client for tax periods when she lived and worked out of state. The Comptroller mistakenly believed that my clients old address in Maryland was her current address for several years, and during that time, unbeknownst to me client, it had been making estimated tax assessments against her each year. Our client subsequently discovered the liens. My office worked with the Comptroller’s Nexus Unit to overturn those assessments, which in turn resulted in the tax liens being released.