Unfiled Tax Returns

Unforeseen life events such as a lost job, an illness, the death of a loved one, or a divorce can cause a person not to file a tax return one year, which then snowballs into multiple years, often leading to mounting tax debt. This can lead to paralyzing fear and anxiety over not knowing what to do, where to turn, or how to make it right.

Milton Law Group tax attorneys specialize in helping clients with years of unfiled tax returns and take a comprehensive and phased approach to resolving our client’s past tax issues.

• Phase I involves a detailed compliance review and investigation of your tax history, including reviewing income tax account histories and public records to determine what years need to be filed and whether any taxing authorities have already begun pursuing you.
• Phase II typically includes preparing all required tax returns, either in-house with our tax professionals or in consultation with the client’s preferred tax preparer.
• Phase III, the collections phase, is where we seek to resolve whatever taxes are owed through a variety of collection alternatives offered by the IRS and state taxing authorities. These options include offers-in-compromise, penalty abatement, installment agreements/payment plans and/or obtaining currently not collectible status.

No matter your situation, we devise a customized strategy for resolving our client’s tax issues, all while maintaining the strict confidentiality and protection afforded by the attorney-client privilege that comes with hiring a tax lawyer.

Tax Debt Resolution

We provide clients (and prospective clients) with a candid assessment of their tax situation and a realistic approach to resolving their tax issues. In most cases, the ads you hear on the radio and see on TV by tax “resolution” (aka non-lawyer) groups boasting their ability to “settle your taxes for pennies on the dollar” grossly exaggerate the ease by which the IRS will accept a settlement of less than what you owe.

Only after a thorough review of each client’s unique situation do we opine on the likelihood of any outcome. However, we do everything allowed under the law to minimize your tax burden and achieve the best result for our clients.

After understanding our clients’ unique circumstances, we seek to resolve their tax liabilities through a variety of collection alternatives offered by the IRS and state taxing authorities. These options include offers-in-compromise, penalty abatement, installment agreements/payment plans, and/or obtaining currently not collectible status.

Audit Defense & Appeals

Milton Law Group has extensive experience representing individuals and small businesses during tax audits by the IRS and state taxing authorities.

By hiring a licensed tax lawyer, the attorney-client privilege allows clients to openly share their concerns upon receiving an audit notice, without fearing that what they say could someday be used against them in a criminal proceeding. In high-stakes audits, hiring an experienced tax attorney is recommended.

So often taxpayers rely on the person who prepared their return to represent them during a tax audit. This can be problematic for several reasons.

• First, there can be a conflict of interest when the preparer has done things with the return they hope to conceal from the client (and the IRS).
• Second, a potential defense for many taxpayers during an audit (or even criminal investigation) is to place blame on their preparer for any errors, omissions, or outright fraud.  If the preparer is representing the client during the audit, the IRS agent may never hear these potential defenses.
• Third, tax preparers and CPAs are often not experienced in tax resolution matters and lack the critical knowledge and experience regarding the different remedies and forums available to taxpayers to challenge IRS audit findings.

When necessary, we have the ability and experience to challenge the IRS’s proposed audit adjustments before the IRS Office of Appeals, the U.S. Tax Court, and U.S. Federal Courts, and have successfully done so for many clients.

Litigation

As an award-winning Trial Attorney with the U.S. Department of Justice, Tax Division, Mark Milton litigated complex tax matters in federal district courts throughout the country.

Having an experienced attorney who understands the pros and cons of the various litigation forums can be essential to successfully challenging unjust IRS actions. Our firm has experience litigating tax matters in the U.S. Tax Court, U.S. District Court, and U.S. Bankruptcy Courts. That in-depth knowledge of the processes and procedures used in tax litigation is invaluable in knowing how the “other side of the table” operates.

Representative Litigation Experience

• Lead counsel in employment tax refund suit brought by an accountant assessed trust fund recovery penalties. Obtained jury verdict against the accountant for the full amount of the assessment.
• Lead counsel in lien priority dispute with medical service providers. Prevailed on summary judgment.
• Lead counsel in foreclosure action brought against salvage yard owner in Kansas City. Resulted in $220,000 settlement; fully paid.
• Lead counsel in wrongful levy action brought by a Minnesota bank after the IRS levied $90,000 in escrowed funds. Prevailed on cross-motions for summary judgment.
• Lead counsel in fiduciary liability action brought against the personal representative of an estate for failing to pay his deceased father’s tax debt while administering his father’s estate.
• Co-counsel in the first ever injunction action referred by the Large Business and International (LB&I) Division of the IRS. The case concerned the promotion of Distressed Asset Debt (DAD), Distressed Asset Trust (DAT), and § 743(f) tax shelters, which allegedly resulted in taxpayers claiming over $370 million in fictitious losses, and involved hundreds of taxpayers and witnesses located in the United States, Brazil and Switzerland. Full concession by all defendants.
• Co-counsel in first every injunction action brought under the Internal Revenue Code against a real estate appraiser. The case involved the appraisal of historic-preservation easements on landmark properties. Full concession by all defendants.
• Lead counsel in nationwide injunction actions against alleged tax shelter promoters and fraudulent federal tax return preparers:
  • Obtained permanent injunction against father and son tax return preparers in the Maryland suburbs of Washington, D.C.
  • Obtained permanent injunction against tax preparation firm and its owner who were represented by global Washington, D.C.-based law firm.
  • Obtained permanent injunction against disbarred attorney and former employee of Manhattan-based accounting firm.
  • Obtained permanent injunction against the promoter of a corporation sole tax-fraud scheme.
  • Obtained permanent injunction against tax return preparer for her alleged failure to exercise due diligence when preparing federal tax returns claiming the earned income tax credit.
  • St. Louis tax return preparers consented to permanent injunction on the eve of evidentiary hearing on the government’s preliminary injunction motion.
  • Conducted an evidentiary hearing with more than 10 witnesses against a Philadelphia tax return preparer; the Court granted a motion for preliminary injunction. Defendant later consented to a permanent injunction and was ultimately convicted of preparing false tax returns.

Employment/Payroll Taxes

The IRS and DOJ Tax Division have ramped up payroll tax enforcement efforts. The government can impose severe civil and criminal penalties, including prison time, on those who fail to withhold, account for, and turn over payroll taxes to the IRS.

If you own or work at a business struggling to meet its payroll tax obligations, you should be aware of the potential for individual lability. Commonly referred to as the “trust fund recovery penalty,” under I.R.C. § 6672, the IRS can impose personal liability on the owners or employees of a business who fail to pay employment taxes. This can lead to owing hundreds of thousands of dollars, if not millions, to the IRS. These liabilities often cannot be discharged in bankruptcy and the IRS can foreclose on your personal assets to satisfy the liabilities.

Milton Law Group’s tax lawyers have also represented clients, including publicly traded companies, in employee classification audits where the IRS challenges a worker’s independent contractor status and seeks to recover additional employment taxes and penalties.

State & Local Tax (SALT) Matters

Due to budgetary restraints, state and local governments have become much more aggressive with tax assessment and collection efforts. Our firm has extensive experience representing clients before state and local taxing authorities in the areas of income tax, sales tax, personal property tax, property tax appeals, and employment tax disputes.

We have represented clients in:

• Sales and use tax audits
• Worker classification disputes, where a state department of revenue seeks to reclassify independent contractors as employees and impose huge payroll taxes and penalties on the business who employs them
• Property tax assessment challenges
• Criminal personal property tax evasion cases, where clients are alleged to have licensed vehicles in other states to evade personal property tax
• Residency challenges for state income tax (i.e. where a state targets “snowbirds” claiming residency in no-income tax states like Florida)

Preparer Penalties & Injunctions

The IRS can impose severe penalties on tax return preparers engaging in unscrupulous conduct. The IRS can even ask the DOJ to seek a permanent injunction banning a preparer from the business.

We have extensive experience representing tax return preparers in IRS/DOJ civil penalty and injunction actions, including cases involving “due diligence visits” and alleged abuse of refundable credits such as the Earned Income Tax Credit (EITC).

Professional Malpractice

As a DOJ Trial Attorney, Mark Milton vigorously pursued fraud cases against unscrupulous tax return preparers, CPAs, and lawyers whose negligent, reckless, and/or fraudulent conduct exposed their clients to millions of dollars in potential tax liabilities and even criminal prosecution.

If you have been mistreated, neglected and/or defrauded by a CPA or tax professional regarding the preparation of your tax returns, the sale of a tax shelter, or the promotion of some other illegal tax scheme, we can help you recover damages and pursue justice for you and others impacted. You may even be able to recover a whistleblower award in some cases.

IRS Whistleblower Awards

According to a Pew Research poll by the Tax Foundation, 79% of people think it is morally wrong to cheat on their taxes. That leaves 21% of the public who think it is okay.

Under the “Tax Whistleblower Program,” the IRS is required to pay an award to any person who provides “specific and credible” information that “substantially” leads to the collection of $2 million or more in tax, penalties, and interest.

The amount of the award can be up to 30% of the amount the IRS collects based on the information provided by the whistleblower. In 2012, the IRS awarded $104 million to the whistleblower in the tax evasion case against Swiss bank UBS for providing information about overseas tax cheats.

Criminal Tax

The IRS Criminal Investigations Division (“CID”) works with many different law enforcement agencies, including the FBI, the DEA, and the U.S. Postal Inspector, to build criminal cases against taxpayers. Many federal crimes, including embezzlement, fraud, drug trafficking, securities violations, and organized crime (i.e. Al Capone), can carry corresponding criminal tax implications.

Criminal investigations may be conducted administratively by IRS CID Special Agents using informal investigation techniques (i.e. surveillance, witness interviews, dumpster diving) and/or through issuing formal summonses. Grand juries, overseen by prosecuting attorneys from the DOJ Tax Division and/or local U.S. Attorney’s Offices, may also conduct criminal tax investigations, although typically cases start with a CID Special Agent.

The Department of Justice Tax Division must approve any criminal charges brought under the Internal Revenue Code (26 U.S.C.), so having a defense attorney with DOJ Tax experience, such as tax lawyer Mark Milton, can be critical to mounting a vigorous criminal defense.

Prior to criminal charges being brought, the DOJ Tax Division typically affords targets of a criminal investigation an opportunity to have a conference with the assigned DOJ Tax prosecutor, allowing the taxpayer’s attorney to argue against criminal charges. This can be a critical step in the process to avoid unwarranted criminal charges or indictments from ever being brought. We have successfully mounted such efforts to thwart would-be criminal charges at this stage.

Criminal tax cases have many origins: a civil tax audit gone bad (the civil agent believes fraud was committed), a whistleblower (disgruntled employee or ex-spouse blows the whistle on alleged criminal conduct), and/or another civil or criminal investigation leads to evidence that provides a basis for believing a tax crime has been committed.

A criminal tax investigation can be a costly and extremely stressful experience, but we do everything in our power to achieve the best result possible for our clients facing criminal investigation and/or prosecution.

IRS CID Special Agents typically travel in pairs. You should contact a tax attorney immediately if you are contacted by an IRS CID Special Agent and/or receive a summons or grand jury subpoena, even if you do not believe you are the target of a criminal investigation or have anything to hide.

As the saying goes, ANYTHING YOU SAY CAN AND WILL BE USED AGAINST YOU.