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Urgent Alert for Businesses: Avoid Penalties, Stay Compliant with New Corporate Transparency Act

What should I know about resolving an IRS tax problem?

What should I know about resolving an IRS tax problem?

If you or your business owe money to the Internal Revenue Service (IRS), you must take the matter seriously. Receiving letters from the IRS can be stressful, and many people ignore them out of fear. However, that is a mistake—the agency has broad powers to collect the taxes you owe including garnishing your wages, seizing property, and putting a lien on your real estate. In addition, putting off an IRS tax problem can lead to larger penalties.

Are you concerned about an IRS tax matter? Here, you can find the answers to common questions we receive from our clients. And if you have specific questions or are ready to take action to resolve your personal or business IRS tax controversy, please contact our experienced legal team to schedule a confidential consultation to learn how we can assist you.

Click on any topic of your interest to reveal the answer.

  • Q: Why do I need a tax attorney?
    • A: Tax attorneys have a deep understanding of the complex field of tax law, as well as the legal ramifications of estate planning, business, transactions, contracts, and real estate law. Tax attorneys utilize the tax laws to minimize the tax impacts on their clients when handling trusts, estate planning, tax disputes, business law, real estate matters, and transactions. It’s important to remember that taxes have the potential to wipe out up to 40% or more of your gains. Additionally, a good tax attorney team, like Silverman Law Office, can assist you with an audit or collection issue with the IRS or the state taxing authority.
  • Q: Why did I receive a letter from the IRS or state taxing authority?
    • A: The IRS and state taxing authority send notices and letters for the following reasons:
    • – To notify you of an audit.
    • – They have questions or corrections regarding a filed or non-filed tax return.
    • – You have an unpaid tax liability.
    • – You are due a larger or smaller refund.
    • – They need to verify your identity.
    • – Information request.
    • – They need to notify you of delays in processing your return.
    • – Your annual property tax statement.
  • Q: What is tax fraud?
    • A: Fraud is deception by misrepresentation of facts, or silence when good faith requires express intent, which results in material damage to one who relies on it and has the right to rely on it. Simply stated, “fraud” is obtaining something of value from someone else through deceit. Enforcing tax fraud is most often a criminal action by the criminal division of the IRS or state taxing authority, which has to be taken seriously as jail time is a real possibility. Additionally, the IRS or state taxing authority can use tax fraud to increase penalties by hundreds of thousands of dollars.
  • Q: If I am unable to pay my delinquent taxes in full, then is it possible to file an offer in compromise (OIC) to pay a lesser amount?
    • A: You may qualify for an OIC if you’re unable to pay your taxes in full or are facing economic hardship or other special circumstances. The process is lengthy, and your specific circumstances are the key to filing an OIC, but our team of tax attorneys has helped many clients successfully navigate the OIC process.
  • Q: Will I be charged interest and penalties for filing and paying my taxes late?
    • A: The simple answer, YES! When you file a late tax return, you’ll be charged interest on any unpaid balance and you may also be subject to failure-to-file and failure-to-pay penalties. Interest accrues on the unpaid balance and compounds daily from the due date of the return. Our team of tax attorneys may be able to assist you with reducing the amount you will have to pay in penalty and interest to the IRS or state taxing authority.
  • Q: What are the options if a taxpayer owes money to the IRS?
    • A: The IRS and state taxing authority have broad authority to collect past-due tax balances. For example, the agency can impose a levy on your wages. This means they can garnish your wages, taking a portion of your salary or wages each time you are paid. In addition, they can attach a federal tax lien to your property, which prevents you from selling it until you have satisfied the debt. They can also seize your property—including your car—and sell it at auction to the highest bidder. Further, the IRS and state taxing authorities can file a lawsuit to reduce your tax assessment to judgment, meaning they can take you to federal or state court to obtain a judgment against you for the full amount of your outstanding tax liabilities. If you are struggling with IRS or state tax debt and lack the ability to pay, we can help.
  • Q: Am I an innocent spouse?
    • A: If you filed a joint tax return but were unaware that your spouse provided the federal government with false information by misrepresenting income or claiming excessive write-offs to lower your tax bill, you are considered an innocent spouse. To avoid being held responsible for your spouse’s tax debt, you can apply for innocent spouse relief if the following conditions are met:
    • – You filed a joint tax return
    • – Your spouse knowingly understated your income on the joint tax return
    • – You did not know—or had no reason to know—that the return was incorrect
    • – It would be unfair to hold you responsible for the unpaid taxes
  • Q: Can a taxpayer refuse an IRS or state taxing authority summons?
    • A: In a tax investigation, both the IRS and state taxing authorities have the authority to issue an administrative summons to obtain relevant records and testimony from the taxpayer and anyone else related to the inquiry—this can include, among others, acquaintances, business associates, current and former employees, and banks. If the taxpayer ignores the summons or fails to cooperate, the IRS and state tax authority can seek a court order to force the taxpayer to comply or face being held in contempt of court. Our experienced tax attorneys can prevent the government from trampling on your rights; call us today!
  • Q: What are the options for resolving a case after an audit?
    • A: An audit can go on and on, sometimes even spanning a year or more, depending on the issues related to the case as well as the taxpayer’s level of cooperation and the complexity of the return. After the audit has been completed, it can be concluded in the following ways:
    • – No change. You have confirmed all items that were reviewed resulting in no changes.
    • – Agreed. The IRS proposed changes and you understand and agree with them.
    • – Disagreed. The proposed changes are made by the IRS or state taxing authority and you understand but disagree with them.
    • If you agree with the proposed changes, you will be asked to sign an agreement and pay the additional taxes, interest, and penalties. If you do not agree, you have the right to file an appeal, protesting the proposed changes. Our team works with taxpayers and accountants to protect our client’s rights and to minimize the potential tax liability.
  • Q: What happens in Tax Court?
    • A:The IRS and state taxing authorities have very different processes when handling a tax court case. What is similar about both processes is that the taxpayer must file a petition or protest against the government. More often than not, tax cases are settled prior to trial. If the case proceeds to litigation, then a government attorney will be assigned to handle the case. Give our team of competent tax counsel a call today if you have a potential tax court case and we will help you evaluate your case, explain your options, and create a path forward protecting your rights.


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Silverman Law Office - Bozeman

504 W. Main St.

Bozeman, MT 59715

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Silverman Law Office - Helena

2620 Colonial Drive

Helena, MT 59601

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