The Top 10 Most Litigated Tax Issues That Require A Tax Litigation Lawyer

If you receive notice from the IRS about income tax issues, it will likely be for one of the following 10 litigated IRS tax issues. Learn what each of these really means and how a tax attorney can protect you:

1. Accuracy-Related Penalties

Everyone is supposed to be accurate when reporting income and expenses on their taxes. If the IRS feels you made a careless error or intentionally ignored tax rules, it can come after you. If you can provide evidence in support of your position, you may be able to avoid accuracy-related penalties.

2. Trade or Business Expenses

Entrepreneurs are allowed to deduct business and trade expenses; however, the IRS can question the expenses you’ve claimed on your tax return. While the IRS wins three of every four trade/business expense lawsuits, a tax litigation attorney can increase your odds of a successful outcome, review your documentation and support your claims.

3. Gross Income

If you fail to report tipped income, interest or stock dividends, the IRS can come after you for failure to report gross income. With an attorney, you may be able to reduce or avoid a penalty.

4. Summons Enforcement

If the IRS sends a summons requesting receipts, records or accounts, and you fail to provide the requested documentation, the courts have the authority to enforce the summons.

5. Appeals From Collection Due Process Hearings

If the IRS has placed a lien on your property over past due taxes, you have the option to appeal to the Tax Court. Only 10 percent of appeals are successful, so your odds are low. If you face a lien on your home from past due taxes, discuss the options with an attorney.

6. Failure to File or Pay Penalties

If you either didn’t pay taxes owed or didn’t file your taxes, you can wind up in court. While there are valid legal defenses to fail to file and pay taxes, taxpayers tend to lose lawsuits related to these tax return issues.

7. Charitable Deductions

If you claim charitable deductions on your taxes, you are responsible for valuing the goods or services donated. Overinflating the value can lead to a lawsuit over the value of your charitable deductions. Additionally, if you try to claim donations to non-qualified charitable organizations, you risk facing penalty.

8. Frivolous Issues Penalty

If you try to challenge tax law using a frivolous tactic, you risk being sued by the IRS. An example of a frivolous argument would be claiming the First Amendment protects you from having to pay taxes.

9. Civil Actions to Enforce Federal Tax Liens

If the IRS determines you owe taxes, it may file a civil action to enforce a lien placed on your property. These cases are typically won by the IRS; however, having an attorney increases the odds of your success.

10. Relief From Joint and Several Liability

In these cases, a spouse who had no issue of his or her current or former spouse’s tax evasion can seek relief from being held legally liable.

If the IRS alerts you to any of these tax return issues, find a tax litigation attorney right away. An experienced attorney, such as Steven Klitzner, P.A., can negotiate with the IRS on your behalf, helping you avoid the stress of litigation.