Most of the time, taxpayers can handle small tax issues on their own without too much trouble but there are times when a NY tax attorney needs to be hired.
Below are the seven (7) most common reasons when a New York tax attorney is needed.
Aggressive Tax Enforcement
Both the Internal Revenue Service and the New York Tax Department can get very aggressive when their rules or the tax laws are not followed.
If one of the following aggressive enforcement tactics are being used by the taxing authorities, then it would be in your best interest to reach out to a NY tax attorney:
- You received a notice that your bank account, wages, or assets are going to be seized;
- A Revenue Officer or NYS Agent came to your home or place of business [ see below ];
- Your bank account was seized due a tax liability;
- Your wages are being garnished due a tax issue.
One of the worst things that you can do is ignore the letters or notices that you are receiving from the IRS or NYS Tax Department.
Some of these notices will have statutory deadlines that give you various legal rights, such as the right to appeal a decision or go to Tax Court.
Unfortunately, if you do open your mail from the taxing authorities or ignore the notices, you can have lost your rights.
If you are receiving notices pertaining to a tax liability, an experienced IRS & New York tax attorney can guide you through the process of resolving your tax liabilities under the best possible terms.
However, the most important step is getting protection in place as soon as possible so that the aggressive enforcement activity [ described above] does not happen to you.
Unfiled NY Sales Tax Returns
If your business has not filed New York sales tax returns, you [not the business] is committing a crime in the State of New York.
Whether you have a LLC [ limited liability company ] or a Corporation, you, as the principal member of the limited liability company or shareholder of the corporation, will be held responsible for the failure to file the sales tax return (s) of the business.
If you have unfiled NY sales tax returns, you should seek counsel from a NY tax attorney.
Failing to Pay NYS Sales Tax
NY sales tax is a “trust fund’ tax.
That is, you are holding the money for the New York State Tax Department.
The money belongs to the State of New York, not you or your business.
You are collecting NYS sales tax on behalf of New York State.
For the privilege to sell goods [ and in some cases services] in the State of NY, you have agreed to pay over the sales tax to the New York State Tax Department.
If you are having trouble with your business, whether financially or otherwise, it is illegal to use the collected sales tax for any other purposes.
As such, you should seek counsel from a NY tax attorney.
NYS Sales Tax Audit
A NYS sales tax audit is a civil [ i.e. monetary matter].
However, there are certain times when a business has failed to report all the sales tax that is due or did not report properly.
If you are subject to a NYS sales tax audit, the NY auditor has the discretion to refer your sales tax matter for criminal prosecution.
Also, if you are looking to save money on penalties, etc. on your NYS sales tax audit, you are best served by working with a NY tax attorney that focuses on tax representation.
IRS Payroll Tax Matters
Typically, IRS payroll tax matters will be referred to a Revenue Officer for enforcement.
Like NYS sales tax matters, IRS payroll tax matters are “ trust fund” taxes [ see above ].
Members or shareholders of the business will typically be held responsible for the payroll taxes of the business.
Therefore, if you are looking to resolve your IRS payroll tax matters under the best possible terms, seek counsel from an IRS & NYS tax attorney.
Unfiled IRS or NYS Income Tax Returns
Under Internal Revenue Code 7201, the willful failure to file a tax return is a misdemeanor pursuant to IRC 7203.
If there is an overt act of tax evasion, willful failure to file may be elevated to a felony under IRC 7201 [ see below].
Under Internal Revenue Code Section 7201, “any person who willfully attempts in any manner to evade or defeat any tax imposed by this title or the payment thereof shall, in addition to other penalties provided by law, be guilty of a felony and, upon conviction thereof, shall be fined not more than $100,000 ($500,000 in the case of a corporation), or imprisoned not more than 5 years, or both, together with the costs of prosecution.”
New York Tax Law Section 1801 governs the failure to file income tax returns. It is a misdemeanor to file a NY income tax return.
However, the repeated failure to file [ that is, multiple years of unfiled NYS income tax returns ] can result in a felony under Tax Law Section 1802.
If you are looking to get back on track with your unfiled IRS or NYS income tax returns, contact us today so that we can protect you before your non-filer matter becomes a more serious matter.
NYS Agent or IRS Revenue Officer Visited You
If your IRS or New York State tax matter has taken extreme priority in the eyes of the taxing authority, you will get a “visit” from either a NYS agent or IRS Revenue Officer.
Regardless of how “nice,” a IRS Revenue Officer or NYS agent may be, their interests are aligned with the taxing authority, not yours.
Their job is to enforce. That it is it. Period. Not to give you the best deal possible or lower your taxes due or possibly reduce the associated penalties.
In order to lower an assessment, reduce penalties, or structure an agreement that works for you and not the IRS or NYS Tax Department, you need to apply the tax laws and strategize with an experienced NY tax attorney.
Also, although your tax matter may be a “civil” [ i.e. monetary ] matter, a Revenue Officer or NYS agent can refer your tax problem for criminal investigation.
Therefore, all communications, whether verbal or written, need to be handled by a NY tax attorney.
When to Hire a NY Tax Attorney
If you have any of the above seven (7) issues, the best time to have hired a NY tax attorney was probably yesterday.
An experienced tax attorney can guide you through the IRS & NYS tax matter; help you make the best decisions for you; and protect you throughout the process.
A CPA, tax preparer, or accountant do not deal with the above issues on a daily basis.
If you are looking to obtain a tax settlement with the IRS or NYS Tax Department, then you would be better served hiring a tax attorney as opposed to a CPA.
There are other tasks that a CPA is better suited for than a tax attorney.
However, if you are dealing with the above issues, you would be better served with the expertise of a tax attorney.
Also, with a NY tax attorney, you have attorney-client privilege. Your tax attorney cannot be asked to testify against you. Whereas, an accountant, CPA, or tax preparer can.
In our experience, procrastination is the biggest obstacle in dealing with either IRS or NYS tax matters.
Tax problems never go away on their own and only get worse over time.
If you have serious IRS or NYS tax problems [ like any of the tax issues described above ]. take the first step to contact us to see if we can be of assistance
