TAX CONTROVERSY
Tax Audits
Mediations/Negotiations
Administrative Appeals
- An IRS/State tax audit is a review/examination of a company’s tax returns, documents, and financial information to ensure information is reported correctly, according to the tax laws, and to verify the reported amount of tax is correct.
- The IRS/State audits approximately six (6) percent of individuals and 9.7% of corporations per year. In 2019, the IRS collected 17.3 billion in additional taxes through audits. You may also be audited if you do not report wages, self-employment income, bonuses, and other income contributes.
- The IRS/State receives copies of the same income reporting forms you do, from copies of your W-2 to Form 1099. If your tax returns are examined by the IRS/State, it does not have to be scary.
We can help you through the audit and help prevent future audits.
Administrative Appeals
Mediations/Negotiations
Administrative Appeals
- Taxpayers have the right to a fair administrative appeal of most IRS/State decisions.
- If the IRS/State sends a notice proposing that the taxpayer owes more money, the taxpayer may want to dispute it through an administrative appeal.
- Appeals is separate from the IRS/State and strives to resolve tax disputes in a fair and impartial way to both parties.
If you disagree with a notice of proposed tax, let us help you navigate through the administrative appeal process.
Mediations/Negotiations
Mediations/Negotiations
Payroll & Trust Funds Tax Penalties
- Mediation, also known as Alternative Dispute Resolution (ADR), can help you if you have an unresolved issue with the IRS/State or disagree with an IRS/State decision or action.
- It’s an informal, confidential, non-binding and voluntary process used to help avoid lengthy appeals and costly litigation and to identify possible settlement terms when all issues are fully resolved except the issue for which mediation is requested.
- An Appeals Officer who is trained in mediation techniques works with the taxpayer and the IRS to resolve the issue.
If you are required to attend a mediation/negotiations with the IRS/State, the Walton Firm is here to help you navigate through the alternative dispute resolution procedures.
Payroll & Trust Funds Tax Penalties
Tax Preparer's Due Diligence Penalties
Payroll & Trust Funds Tax Penalties
- If you are responsible for your company’s payroll and you did not pay the required payroll taxes, not only can your company be subject to penalties for not paying the payroll taxes or paying those taxes on time, you could also be subject to a trust fund penalty.
- A trust fund tax is money withheld from an employee’s wages (income tax, Social Security and Medicare taxes) by an employer and held in trust until paid to the Treasury.
- If you, as the responsible party, did not submit those taxes to the IRS/State, you could personally be subject to the trust fund penalty. About 70% of the annual revenue collected by the IRS/State comes from payroll taxes. According to the IRS/State, employers who don’t follow employment tax laws are subject to civil and criminal penalties.
If your company has been assessed with past due payroll taxes or you have been assessed a trust fund penalty, let us help you or your company negotiate with the IRS/State to resolve your payroll issue and avoid a trust fund penalty.
Tax Preparer's Due Diligence Penalties
Tax Preparer's Due Diligence Penalties
Tax Preparer's Due Diligence Penalties
- In an effort to reduce inaccurately filed tax returns, the IRS also examines a percentage of tax returns related to Earned Income Credit (EIC), Child Tax Credit (CTC), Additional Child Tax Credit (ACTC), American Opportunity Tax Credit (AOTC) and Head of Household filing status.
- If the IRS can prove that a tax preparer did not perform the due diligence to verify if a taxpayer was should receive those credit, the IRS/State can assess a due diligence penalty against the tax preparer for not meeting the requirements.
- The IRS penalty is $560(as of 2023) per occurrence per tax return per year.
If you as a tax preparer has been audited by the IRS or you are subject to a tax preparer’s penalty, we can help you navigate through the audit process and help you avoid the tax preparer’s penalties in the future.