Tax Problem Attorney Blog

Articles Posted in Tax Disputes

IRS File Drawer Label Isolated on a White Background.

No taxpayer wants to receive news of a tax deficiency, tax audit, or other bad news from the IRS; however, it may turn out that the only thing worse than receiving bad news from the IRS is not receiving notice that you need to take action to correct a past tax filing or past tax mistake. Almost invariably, the longer a taxpayer takes to fix his or her underpayment of tax or outstanding tax bill the greater the amount of interests and penalties he or she is likely to pay. Thus, while it may be painful to receive notice of a tax lien or other adverse action by the IRS, not receiving the notice in a timely manner is worse.

Unfortunately for more than 24,000 taxpayers, a report from the Treasury Inspector General’s Office shows that problems in the tax lien process do occur.

When Can the IRS File a Tax Lien & What is Its Impact?
The filed federal tax lien represents the government’s notice to the world of its claim to your property because you have failed to satisfy a tax obligation that was due and owing. The lien against your property can be applied to any type of property including personal belongings, tangible and intangible assets, and real estate. However, a tax lien is only filed against the taxpayer when at least three facts are true.

First, the taxpayer has a tax obligation that the IRS has assessed on its books. Second, the IRS has sent a Notice and Demand for Payment informing the taxpayer of the amount owed to the government, and third ten days have passed and the IRS has not been paid. When these items are all true a lien in favor of the IRS arises automatically, and the IRS may file a Notice of Federal Tax Lien. At this point, with the filing of the tax lien, what was previously a private matter between the IRS and the taxpayer now becomes part of the public record with all of its attendant bad consequences.

What Effect Does a Federal Tax Lien Have?
A federal tax lien isn’t only a claim against the property you currently may own, it is also a claim against property you may come to possess in the future. The Notice of Federal Tax Lien is intended to give notice to your creditors regarding your status. Furthermore, it allows the federal government to establish the priority of its claim ahead of other creditors against you.

A collateral effect of a federal tax lien is a hit to your credit score and an easily accessible public record of your tax deficiency. The hit to your credit score is likely to make securing a loan, mortgage, or financing more difficult. Employers, landlords, and other individuals may not view such action favorably and you may face adverse actions from these individuals.

What can a Taxpayer Do When Facing Federal Tax Lien?
A taxpayer facing a federal tax lien has a number of options to approach the matter. However, every tax situation and IRS collection situation is unique and action should not be taken without a careful analysis of the surrounding facts and circumstances. Options taxpayers have to satisfy their federal tax lien include:

  • Pay the tax in full – This option is the most direct, but it is inappropriate if you believe that the tax lien is erroneous or otherwise incorrect. However, if you believe that the amount due and owing is correct and you do not wish to challenge any penalties, you may pay the IRS via electronic payment, a credit or debit card, or with a check in-person or through the mail.
  • Apply for an installment agreement or an offer in compromise – For taxpayers who want to pay their taxes, but are unable to pay the amount in full one of these programs may provide the flexibility to discharge the tax debt. An installment agreement can allow a taxpayer to arrange for a payment plan. An application for an offer in compromise can be filed if the taxpayer will not be able to pay the liability in full during the collection statute of limitations pursuant to strict IRS guidelines.
  • Appeal the IRS decision – Most IRS collection actions are subject to appeal to the IRS Office of Appeals. The main options for appeal are the Collections Due Process (CDP) and the Collections Appeal Process (CAP).
  • Request additional time – Taxpayers may ask the IRS to delay collection and report the account as uncollectable due to a significant financial hardship. Even if collection is delayed under this provision, penalties and interest will continue to accrue.

Taxpayers who fail to take action regarding a tax lien face a host of consequences including the seizure of his or her property to satisfy the tax debt. However, you do have options. To discuss your potential options to handle a tax lien call the tax professionals of the Brager Tax Law Group at 800-380-TAX-LITIGATOR or contact us online.


You filed your taxes like you were supposed to and you should be able to spend the rest of the year free from worries about taxes. But, then one day it appears. The envelope is fairly nondescript except for the name and address of the Internal Revenue Service emblazoned upon it. Maybe you tear it open immediately or maybe you wait until you are feeling a little braver, but in either case your mind starts racing and you can’t quite shake the feeling that you’ll soon be facing major tax problems.

However, not every notice from the IRS represents a major issue or concern. But, if you do receive a notice that alleges that serious tax mistakes or tax crimes have occurred, the Brager Tax Law Group may be able to help you resolve your issues with the IRS.

Above all else, do not panic if your see a notice from the Internal Revenue Service
When one sees a letter from the IRS it can be difficult to keep one’s mind from wandering to the parade of potential horribles that could be lurking inside the envelope. While many may fear the dreaded IRS audit, an audit only represents one potential possibility – good, bad or neutral – that can come out of a letter sent by the IRS. Now, despite out first assumption usually being the worst, take account of the fact that there are, at least, three potential classes of outcomes here. A positive outcome is possible if the notice had been sent to advise you of an error in your favor or a larger than expected return. The notice can also be neutral in that it may simply state that the IRS has received and has processed or is processing your documents. However, there is the chance that the letter will not bring good news. It may notify the taxpayer of an underpayment of tax, offshore account issues, or that the IRS has identified other problems with the return. If you are unsure or confused by the notice you receive, it is always prudent to bring it to a tax professional so that it can be reviewed and your mind can be put at ease.

If you need more time, simply ask the IRS
Recommending that taxpayer seek professional tax help often elicits the response of, “But what if I don’t have time to see a tax lawyer –or accountant?” This is an understandable objection because people live extremely busy lives. There are, no doubt, a multitude of interests and obligations that compete for our time and attention. But, “I didn’t have enough time,” is almost never an acceptable excuse for failing to consult with a tax professional when criminal or civil tax consequences are possible.

This is because, if they are legally able to do so, the IRS is typically willing to grant a brief when the taxpayer asks for it. Therefore, if the agent asks you a question that you do not think you can answer honestly or without admitting to a tax violation or tax crime, you can often request additional time. The IRS agent is aware of the seriousness of the situation and the fact that you need to ensure that any statements you make to the IRS are accurate. Therefore, if the taxpayer asks for more time to review and prepare their records, the IRS is typically willing to grant it. You can use this time to gather evidence that supports your claims and to contact a tax attorney.

However, you must be sure that you request an extension within any applicable time limits or statutes of limitations. For instance, if you receive a deficiency notice you only have 90 days to respond in writing to dispute the allegations by filing a Petition with the United States Tax Court. This particular date cannot be extended. However, most other IRS notices are less strict in their timing. A tax lawyer can explain the amount of time you have to respond to the particular notice you have received.

Review your records ensuring that they are accurate and complete
If the notice you received states that you made a mistake in your arithmetic or inputting data from the W-2, 1099 or other tax form be sure that the mistake is yours and not the IRS’. While it is rare, there have been instances of a form mismatch involving 1099s. Therefore, it is essential that you review not only the name and address that appears on the 1099 or other tax form, but also the employer and employee identification numbers, the amount of income reported on the form, and any other information that has been reported in your tax filing.

If you have verified this information, the mistake appears to be on your end, and the amount in controversy is large, it is often prudent to seek the advice and guidance of an experienced tax professional. The Brager Tax Law Group can help you arrange an offer-in-compromise or, depending on the situation, apply for other forms of tax relief. To schedule a confidential consultation, call 800-380-TAX-LITIGATOR today or contact us online.

The 6th Circuit recently taught an expensive lesson to a Michigan couple about carefully following procedure when dealing with tax problems and subsequent loss of their $64,000 refund occurred because of a seeming minor error. Following an IRS tax dispute began, as the IRS’ records stated that the envelope containing the Stockers’ amended 2003 return was postmarked four days late. Compounding the Stockers’ tax problems, the IRS failed to retain the postmarked envelope in question. Seeking help in their tax dispute the Stockers brought suit, but the District Court granted the IRS’ motion to dismiss for lack of jurisdiction due to the suit being barred as past the three-year period for filing a claim for a tax refund. On appeal, the 6th Circuit affirmed.

The 6th Circuit was unmoved by the Stockers’ attempts to prove the mailing date of their return through means other than those set forth in IRC Section 7502. As the IRS’ records indicated that the returns were postmarked four days late, the Stockers could not prove timely delivery under IRC Sec. 7502(a)(1), which states that the postmark of the returns establishes the date of mailing. Additionally, Mr. Stocker’s failure to obtain the certified mail receipt precluded the use of IRC section 7502(c)(1), which states that the “date of registration shall be deemed the postmark date”. The court rebuffed the Stockers’ attempts to prove timely delivery through circumstantial evidence; rather, the Court stated that its own precedent prevented any other method of proof. Finally, the court held that the District Court had not abused its discretion in refusing to draw the inference that the Stockers had timely filed their returns because of the IRS’ failure to retain the postmarked envelope in violation of internal policy.

Despite the seemingly minor nature of the Stockers’ mistakes, the 6th Circuit was highly unsympathetic to their plight. Ultimately, the court reiterated that only certain procedures are available to prove timely filing, and the Stockers’ own mistakes precluded them from receiving relief, despite their innocent nature. While calling it “unfortunate” that the Stockers could not prove the timeliness of their return, the court sent a strong message to taxpayers that it was unwilling to make exceptions for even the most innocent of mistakes.
Continue reading

Filing a false tax return in violation of Internal Revenue Code (IRC) Section 7206 can result in deportation of a resident alien, i.e. a green card holder, according to the 9th Circuit Court of Appeals. Kawashima v. Holder (9th Cir. 2010). In a long running case Mr. Kawashima pled guilty to subscribing to a false tax return in violation of IRC Section 7206(1). His wife pled guilty to aiding and assisting in the filing of a false tax return in violation of IRC Section 7206(2).

Generally green card holders can be deported for committing an “aggravated felony.” Tax fraud or tax evasion in violation of IRC section 7201 is specifically defined by the immigration laws as an aggravated felony. Aggravated felonies also include any offence that involves fraud or deceit which exceed a loss to the victim of more than $10,000. The Kawashimas argued that since tax fraud was specifically defined as an aggravated felony Congress meant to exclude all other tax crimes including filing a false tax return. The 9th Circuit disagreed, holding that under the plain language of the statute not only was tax evasion a removable offense, but so was filing a false tax return.

This is just another reminder that the collateral consequences of a criminal tax conviction can reach far beyond the potential prison time.

If you or a loved one has been accused of civil or criminal tax evasion contact the tax lawyers at Brager Tax Law Group, a P.C. for a consultation.