The Law Offices of John P. McDonnell has an experienced tax litigation lawyer who can assist you with either IRS or California state tax disputes.
The term “tax litigation” conjures up images of lawyers and judges examining witnesses in a formal courtroom, but the work is actually much broader than that, and might be thought of as “tax controversies.”
A tax controversy normally begins with an IRS Agent initiating an audit. Often a routine audit can be handled by the tax return preparer or a CPA, but at times the IRS Agent proposed novel or questionable theories that my require an attorney coming in even at this stage. In those cases, we will develop legal arguments and briefs to submit to the Agent and his supervisors, to suggest that the new theories are not justified and the taxpayer’s actions are correct. At times, we may need to “go upstairs” and request that the IRS National Office review the legal issues and issue what is known at “technical advice” to the local office.
Assuming the dispute can not be otherwise resolved with the Examining Agent, the Agent will usually close the audit and issue a notice to the taxpayer of intended tax increases, and give the taxpayer 30 days to request a conference with the IRS Appeals Office. This is a critical stage: the Appeals Office is independent of the Examination and Audit process, and this Office is designed to settle tax cases without a formal court case. If you have not already hired an attorney, you should bring one in at this stage. An attorney is your best representative to argue the facts and law to the Appeals Office, and to negotiate a reasonable settlement.
Cases that can not be settled will result in a formal “Notice of Deficiency” listing the taxes and penalties that the IRS wants to impose. At this stage, you have two options for going to court. First, you can delay any payment of tax by filing your case in the Tax Court. Since the payment of the claimed tax may be prohibitively expensive, this is the most popular option. But it means your case will be decided entirely by the Tax Court judge—there is no jury trial. The second main option is to pay the tax claimed by the IRS and pursue a refund suit in the District court, where you have a right to a jury trial on factual issues. There are different procedures for a Tax Court case and a District Court case, so you should be sure to work with an experienced San Jose IRS attorney.
If you do not win in the initial court case, you have a right to appeal (and the IRS has a right to appeal if you win). Regardless of where the case starts, the appeal is heard by the Circuit Court for the state where the case began. In California, this is the Ninth Circuit Court of Appeal. The Court of Appeal is yet another court with detailed and precise procedures (as well as settlement venues) that require an experienced attorney.
Finally, the case could end up in the Supreme Court, but that Court only hears tax cases that have a broad impact on interpretation of the tax laws. Nevertheless, we have been admitted to practice in the U.S. Supreme Court for 20 years, and stand ready to pursue the case that far, if this is warranted. Contact us today to see how we can help you.