Accomplishments:

Frequently, when the client contacts me early in the process, I can eliminate or minimize the impact of a tax notice or audit. Here are just a few of the many times I have been able to help clients who have been assessed additional taxes by various tax bodies (not just the IRS!):

• In the last six months, I have advised more than 30 clients who have had debts forgiven by various lenders on the tax consequences of the debt forgiveness. In nearly 80 percent of the cases, the income was excludable under various provisions of the Tax Code, and the client owed no tax. In at least half of the cases, the client’s tax preparer had failed to review the available exemptions and incorrectly told the client that the income was taxable, and that significant tax was due.
• The IRS had assessed an entertainment client nearly $80,000 in additional taxes and penalties, and was requiring strict proof of business and personal deductions. Unfortunately, while the client had some receipts, he did not have all of the receipts, and faced a significant bill. I was able to prove the expenses by alternate means, and the IRS eventually accepted all of the client’s expenses, saving the client $77,000, and reducing the assessment to income items the client had inadvertently left off the return. Total amount due: $2,900.
• Advised a client who had been assessed over $10,000 – not including substantial excise penalties – by California’s Franchise Tax Board for participating in a fraudulent tax shelter. The client had been put into the shelter by her preparer, who was under investigation. I interceded on the client’s behalf with the State of California, and advised her on the potential Federal tax impact of the investigation.
• Advised another entertainment client on the tax consequences of several settlement agreements. The client had been in litigation with two separate defendants over two different matters. The client was concerned that he would face a significant tax hit in multiple tax years as a result of the settlement terms. After analyzing both agreements, I was able to assure the client that he faced no immediate tax impact, and advised him how to manage the impact of future payments.
• Advised a high-net-worth client on their options after the Illinois Department of Revenue had assessed use tax exceeding $160,000. The client had used the item in question for only a minimal period in Illinois, considering its use in other states. I analyzed Illinois law, as well as the use tax laws of other states and their interaction with the Dormant Commerce Clause and relevant tax treaties, and advised the client on the best negotiating strategy to reduce the total use tax to less than $90,000, with Illinois being entitled less than $4,000 of that amount.
• Successfully challenged the IRS’ denial of a multinational corporation’s investment partnership losses. The company had set up investment LLCs which sustained significant losses. The IRS denied the losses, and assessed over $12.0 million in additional tax. I reviewed the relevant tax returns, supporting financials and various organizing and loan documents, and was able to substantiate all but $2.0 million of losses, thereby reducing the client’s liability to less than $1.0 million.

People I could have helped, if only they’d come to see me sooner:

• A client came to me after the IRS had denied various unreimbursed employee business expenses. The client’s previous advisor – an unregistered tax preparer – had advised the client to write a letter to the IRS ‘explaining’ the deductions. Moreover, the preparer had failed to respond to follow up inquiries by the IRS, and had blown off a scheduled meeting with the IRS as well. By the time the client came to me, the IRS was entrenched in their position, and issued notices of deficiency for multiple years totaling nearly $20,000 – not including penalties, much of which could have been avoided.
• A client’s former partner opened a separate location under the partnership’s name, even though the partnership had been terminated. Eventually, the partner accrued over $150,000 of payroll taxes, which the former partner failed to pay. By the time the client came to me, the IRS had assessed the client liability for the full amount and penalties, while the partner, who had the resources to pay the taxes, avoided all liability.
• A tax preparer was accused of tax fraud by the IRS and faced a maximum sentence of 15 years and a maximum fine of $250,000. Despite this, the preparer chose to rely upon weak arguments and exacerbated their case by contesting the charges in the face of mounting evidence. Even so, the preparer was the beneficiary of judicial leniency in sentencing, but wanted to know if an appeal or motion was viable. After reviewing the documents, I determined that the preparer had gotten the best outcome under the circumstances, but could have gotten a better outcome had they been the recipient of better advice. Unfortunately, another attorney disagreed, and filed a motion to reconsider which the court denied. The court then vacated its original order – which had given the defendant three months to report to prison – and took the defendant into immediate custody.