It’s no secret that tax law is complicated, complex, and often downright confusing. It’s why more people than ever are going with professionals when it comes to filing their taxes, and it’s also why it’s vitally important to understand what civil tax controversies are and what these trials look like. These civil tax controversies and trials FAQs will cover:
- What tax controversies are
- Civil vs. criminal tax controversies
- How trials get brought up
- The shortcomings of audit protection
- Reasons for a controversy going to court
- The importance of hiring a competent tax law attorney
Put simply, you can’t afford to have tax liability. Whether you haven’t filed in the past or your filings have been inaccurate, you could be on the radar of the Internal Revenue Service or IRS. With all of that in mind, let’s look at what civil tax controversies are and how you can avoid liability.
What is a Civil Tax Controversy?
Civil tax controversy is its own area of legal practice that covers any disputes between a tax collecting entity such as the IRS and a taxpayer. This can come as a direct result of an audit, and it often does, but this is not a requirement.
Is There Another Type of Tax Controversy?
Tax controversies can be broken up into two categories: civil and criminal. In a criminal tax controversy, a ruling against a defendant could result in either probation or jail time (loss of freedom). In contrast, a civil tax controversy will typically result in penalties against the defendant (loss of assets). While civil tax controversies are less severe than criminal tax controversies, penalties should be avoided at all costs.
How Might Civil Tax Controversy and Trials Occur?
One of the most common charges pursued in a civil case is civil tax fraud. This could result in penalties that get brought up due to a taxpayer not filing their taxes or willfully filing information that they know is fraudulent. It’s important to remember that even not filing your taxes is fraud. The way this is justified is that since there is a minimum income requirement for taxpayers to have to pay their taxes, not filing yours at all even though you make the minimum income requirement qualifies as fraudulent activity.
What if I Filed My Taxes With a Service That Has Audit Protection?
It’s common to see tax filing services that offer some degree of audit protection, often for a small fee. While there is some protection here, this isn’t going to prevent the IRS from conducting an audit or discovering discrepancies somewhere along the way. There is no surefire way to prevent the IRS from finding an instance of civil or criminal tax fraud short of ensuring that your taxes are filed correctly so that there is no fraud being committed at all.
Will This Go to Court?
Not necessarily. There are only two tax controversies that tend to be prosecuted: a deficiency action or a refund action.
Deficiency Action: In a deficiency action, the U.S. Tax Court will file a lawsuit to contest what they see as a deficiency. In other words, they believe that you have not paid the total amount you are supposed to pay, so they’re bringing up a suit to settle the matter.
Refund Action: A refund action is a little different. In a typical refund action, the taxpayer brings up the suit. These are commonly brought up when a taxpayer believes that they have overpaid their taxes and wants a refund.
Civil tax controversies that don’t fall under these actions tend not to go to trial. Instead, they are handled between the Internal Revenue Service and the taxpayer themselves, without court. It’s important to remember, though, that a civil tax controversy is a serious thing to deal with, whether or not you’re going to court over it. No matter what your specific situation is, you should seek out the services of a competent civil tax attorney.
What Type of Lawyer Handles Civil Tax Controversies and Trials?
The sad reality is that not all attorneys represent all aspects of law or even tax law. Along with that, some attorneys and firms will have far more experience and skill than others. When you consider the fact that an adverse finding or ruling could result in the forfeiture of assets and financial strain, not to mention the stress of being under investigation by the Internal Revenue Service, it’s clear that you should seek out the best legal counsel possible.
Civil tax law is complicated, but the important thing here is that you’re not handling this alone. While we’ve covered the basics of civil tax controversies and trials, the point is that your tax attorney will be able to cover the ins and outs of your specific case so that you can rest easy and not be forced to represent yourself. You must pick the right civil tax attorney for the job.
Ask Norman Spencer Law Group About Civil Tax Controversies and Trials
With so many civil tax attorneys and firms out there, some of them with high ratings and good reviews, it can be tough to find the one that can help with your case. You need a firm that has decades of experience handling tax controversies like yours and experience with handling the Internal Revenue Service. A firm like the Norman Spencer Law Group.
If you’re facing an investigation by the IRS or even if your case has progressed further and is facing trial, we’re here to help. Feel free to reach out with the particulars of your situation, and someone from our dedicated team will get back to you as soon as possible to help you out.