As a tax attorney specializing in tax resolution, my expertise primarily falls into two categories: (1) EXAMINATION and (2) COLLECTIONS. The Examination process, often referred to as an “audit,” involves the IRS scrutinizing specific items on your tax return, such as income or deductions, for accuracy. On the other hand, Collections deals with the resolution or settlement of confirmed tax debts, assuming the tax return’s accuracy.
In addition to these services, I also assist clients with tax return preparation. While my firm is equipped to handle a range of tax return types, we generally do not prepare corporate income tax returns, payroll tax returns, or sales tax returns. These tasks are typically better suited to a CPA. Moreover, we do not offer bookkeeping services.
Regarding fees, I offer a hybrid agreement that can include a combination of hourly and flat fee structures. The core of my pricing is a base flat fee, which covers a defined scope of services. For additional, specialized services that may arise, there are optional add-ons available.
My tax representation services cover various areas, including Federal, State, and Local tax authorities. They can cater to both individual and business clients, encompassing a wide range of tax types such as income tax, sales tax, payroll tax, estate tax, excise tax, trust fund penalties, and responsibilities related to “responsible person” liabilities.
Specifically, in “Collections” representation, my approach is divided into three distinct phases: (1) Assessment, where we review and analyze the tax situation; (2) Compliance, focusing on ensuring all filings are up-to-date and accurate; and (3) Resolution, where we develop a plan to address and settle the outstanding tax debt in a manner that aligns with the client’s financial capabilities.
In the “ASSESSMENT” stage, we conduct a thorough examination of the client’s tax records, including their tax account, return transcripts, and income documentation. This involves identifying which tax years have been filed, pinpointing any overdue years, and checking if the IRS has issued any substitute returns to establish outstanding balances. Our goal is to calculate the client’s total debt, breaking it down into principal tax, interest, and penalties. We’ll also evaluate if the client is eligible for any penalty reductions.
The client’s position in the IRS’s collection sequence is crucial. Initial stages are marked by a series of notifications – termed ‘Notice status’ – as the IRS begins its collection efforts. These notices often include crucial appeal rights, and we prioritize maintaining these rights whenever feasible. Alternatively, the client may already be in the “Collections” stage, involving the IRS Automated Collections System, which can lead to levy actions.
We also scrutinize all accessible third-party data, including W-2s, 1099s, and retirement distributions. This data aids in preparing any overdue returns and assessing if previous returns were flagged for underreporting. We inform the client about any existing liens or levies found in IRS transcripts. If needed, this phase transitions into filing overdue returns, leading to the “COMPLIANCE” phase. Our assessment encompasses Federal, State, and Local tax authorities.
The “COMPLIANCE” phase is a critical step in resolving tax issues, primarily focused on preparing and submitting overdue tax returns to ensure the client meets all necessary filing obligations. This phase encompasses a variety of tax filings across different levels of government.
For Federal tax compliance, we handle the preparation of essential forms, such as Form 1040, which is the standard IRS form used by individuals to file their annual income tax returns. This form is crucial for accurately reporting income, calculating tax liability, and claiming any applicable deductions and credits.
At the State level, our services extend to specific state tax requirements. For example, in Kentucky, we assist with the preparation of Kentucky Form 740. This form is used by Kentucky residents to report their state income tax. Each state has its unique forms and requirements, and we are equipped to handle these variations to ensure full compliance.
Additionally, we address Local tax compliance needs. For instance, in Louisville, we prepare the Louisville Metro Form OL-3, a form required for local occupational taxes. Similar to this, we are adept at handling various localities’ equivalent forms and requirements. These local filings are often overlooked but are vital for comprehensive tax compliance.
Overall, the “COMPLIANCE” phase is not just about filing overdue returns; it’s about a meticulous process to ensure that all federal, state, and local tax obligations are thoroughly met, thus bringing the client fully up to date with their tax responsibilities. Our approach is detailed and tailored to each client’s unique situation, ensuring no aspect of their tax profile is neglected.
The “RESOLUTION” phase represents the conclusive stage in our tax resolution process. In this phase, our primary objective is to devise a strategic plan tailored to effectively address and resolve the client’s tax debt, taking into consideration their unique financial circumstances.
To achieve this, we conduct a comprehensive financial analysis of the client’s situation. This analysis involves an in-depth review of various financial aspects, including:
Assets: We assess all of the client’s assets, which may include real estate, investments, bank accounts, and other valuable properties. Understanding the total value of these assets is crucial in determining the client’s overall financial capacity.
Liabilities: We examine the client’s debts and obligations, such as loans, mortgages, and other financial liabilities. This helps us understand the demands on the client’s finances and how they may impact the ability to address tax debts.
Income and Expenses: A thorough review of the client’s regular income and expenses is conducted. This includes not just their primary income but also any secondary sources, as well as a detailed breakdown of monthly or annual expenses. This step is essential to gauge the client’s disposable income and their ability to make payments towards their tax debt.
Net Realizable Equity After Exemptions: We calculate the client’s net realizable equity, considering allowable exemptions. This provides a clear picture of what the client can realistically afford to pay after accounting for essential living costs and legal exemptions.
The outcome of this financial analysis, combined with our earlier tax assessment, forms the basis for determining the most suitable tax resolution plan for the client. This plan might include options such as an installment agreement, an offer in compromise, or other IRS relief programs that best fit the client’s financial situation and tax debt profile.
Our goal in the “RESOLUTION” phase is not only to find a solution to the immediate tax issue but also to ensure that the resolution is sustainable and manageable for the client in their current financial context. This customized approach ensures a more effective and enduring resolution of the client’s tax challenges.