Understanding A Tax Controversy Law Practice


There is a necessity to pay taxes. However, it is our practice philosophy to help clients keep their necessary taxes to a minimum, wherever legally possible.


Tax controversy (deficiency) simply means a dispute with the IRS or other state or local taxing authorities. A standard of a Tax Controversy Attorney is the ability to work anywhere in the US. A Tax Controversy Attorney is also available for individual or business tax issues and tax criminal matters.

Preventative measures are accomplished in planning taxes appropriately with the financial team. The team may consist of a CPA, valuation specialists and corporate financial officers.


When necessary, the Tax Controversy Attorney duty is to represent client's interests aggressively before the IRS, both administratively and in court. Working for our clients' to be treated fairly and pay no more than legally required.


The IRS can Assess a Penalty EVEN when No Return is Filed


The IRS can assess fines, penalties and other charges even when no tax return is filed by the taxpayer or business entity. In order to calculate the deficiency, the IRS simply assumes that the taxpayer filed a tax return with the amount of tax owed at zero. The IRS also may treat the amount of tax on a tax return as zero if the taxpayer files a statement or letter denying responsibility for the amount of the assessment.


In Penn Mutual Indemnity Co. v. Commissioner, the taxpayer filed a tax return with the correct amount of tax indicated on the return, but also included a letter stating his belief that the tax was invalid and unconstitutional. The taxpayer also included a statement that he would not pay the tax on the advice of counsel. According to the IRS, the tax return included the correct amount of tax, so no deficiency existed and the Tax Court was without jurisdiction over the matter. Ultimately, however, a deficiency was found to exist due to the recitations on the taxpayer’s transmittal letter. Because the taxpayer denied responsibility for the assessment and stated his belief that it was invalid, the return was held to actually report no tax, so a deficiency existed for the entire amount of the tax disputed.


The IRS can Assess Penalties Based on an Amended Return

Typically, the filing of an amended return will have no impact on assessment and collection process. However, the filing of an amended return may impact the deficiency process. Taxpayers can file amended returns only in certain limited circumstances, and the right to file one is not absolute. The right exists where:


The amended return is filed prior to the due date of the original return; The taxpayer treats a contested item consistently on the original and amended return; and The taxpayer treated an item incorrectly on the original item but chose to employ a permissible alternative treatment for the item on the amended return.


When the taxpayer files an amended return reporting a lesser amount than what was reflected on the original return, no deficiency will exist, provided the IRS maintains its position that the original return reflected the correct amount of tax. In that case, the taxpayer is not entitled to receive a statutory notice of deficiency from the IRS. In contrast, when the taxpayer’s amended return shows a greater amount of tax than the original return, the tax amount reported on the amended return is considered the tax reported for deficiency purposes. Thus, the amended return can often be an important starting point for determining the taxpayer’s deficiency.


Tax Deficiency Concerning IRS Matters Is Nationwide



Your team at Smith Slusky practices tax controversy law every day. Clients are all over the United States working on federal IRS matters. Our team includes a tax controversy specialist, property valuation experts and litigation experts. Here is just part of the scope of our practice:


  • Corporate and individual tax planning

  • IRS controversies, both administratively and in court

  • IRS criminal cases


Attorney/Client Relationship Understood


  • An attorney/client privilege is created when a person seeks help and advice from an attorney, as to matters within that attorney’s professional competence, and the attorney agrees to provide that advice.

  • How to enter into an attorney/client relationship is to agree orally or in writing that the Tax Controversy Attorney will represent you.

  • Because the attorney/client relationship is personal and privileged, any communication is kept in confidence should be via mail, phone, or fax, or of course, in person.

  • Posting of material on this web site DOES NOT establish any attorney/client relationship.


Contact our lead Tax Controversy expert, Howard Kaplan, at Smith Slusky.

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