Serving Clients Throughout Minnesota and Western Wisconsin
Just because a tax official at the IRS or Minnesota Department of Revenue says you owe additional taxes, that doesn’t mean they are right. Proving them wrong, however, is the hard part.
Tax disputes have almost become a way of life for taxpayers both within and outside the United States. As a result of intense media attention relating to tax avoidance and tax evasion, the U.S. government has provided additional resources to the IRS in order to expand audits of American taxpayers, focus on cross-border transactions, and target certain arrangements that the IRS finds offensive. Legislative, administrative, and judicial landscapes constantly change, making it challenging for taxpayers to defend their tax positions and manage their tax risks.
The experienced attorneys at Pridgeon & Zoss, PLLC are well-positioned to assist clients in avoiding tax disputes, managing them when they occur, resolving them before litigation, and, if necessary, litigating them in court. We assist our clients in resolving tax disputes efficiently and effectively. Our lawyers represent clients in the U.S. Tax Court, Minnesota and Wisconsin state courts, and in dealings with the IRS and Minnesota Department of Revenue.
We Handle a Wide Range of Minnesota Tax Disputes
Our firm offers a range of services in all areas related to tax liability disputes. A general litigation firm may provide high-quality representation, but they can lack detailed knowledge of tax law and procedure. Our tax law attorneys, however, have decades of experience in tax litigation and controversies. We have the legal knowledge and background needed to advocate for you during disputes with federal, state, and local taxing authorities.
Understanding Your Tax Audit
The IRS and the Minnesota Department of Revenue sometimes audit taxpayers to verify their tax information. Any tax audit should be taken seriously even if you know your records are accurate. There are a number of reasons why you may be selected for a tax audit, including:
- Problems with your paperwork
- Random selection based on computer algorithms
- An audit has recently been conducted on someone you do business with
An audit does not necessarily indicate that you have committed a crime or that your tax paperwork is incorrect. You can, however, protect your rights during an audit by consulting a tax attorney. Tax agents look out for the government’s interests, so having legal representation is recommended. Should a dispute arise, your tax lawyer will become familiar enough with your circumstances to negotiate a better outcome to help you seek appropriate tax relief.
Filing a Tax Appeal
If you disagree with the results of the audit, your next steps depend on whether you’re dealing with the IRS or the Minnesota Department of Revenue.
There are a number of procedures and deadlines involved in disputing a federal tax decision. In most cases, a disagreement can be settled without the need for a court hearing. Tax court is your only option if you do not want to appeal with the IRS.
Your dispute letter should not be sent directly to the Office of Appeals. You can send it to the IRS address provided in your letter. Your letter will indicate the deadline for filing an appeal, which is typically 30 days. All communications with appeals office personnel may be carried out in person, via correspondence, or by telephone.
Depending on your situation, you can either file a small case request or a formal written protest.
Small Case Request
A small case request can be filed if the additional tax and proposed penalties do not exceed $25,000. To get started, you send a brief written statement indicating which audit results you disagree with and why. Your protest will be considered by the IRS Examining or Collection office before going to the Office of Appeals.
Filing a Formal Protest
In cases involving more than one tax period, and if any tax period exceeds the threshold of $25,000, a formal written protest must be filed for all applicable periods. Your protest should contain the following information:
- Your name and address, and a daytime telephone number.
- A statement that you want to appeal the IRS findings to the Appeals Office.
- A copy of the letter proposed tax adjustment.
- The tax periods or years involved.
- A list of the changes that you don’t agree with, and the reason for disagreeing.
- The facts supporting your position on any issue that you don’t agree with.
- The law or authority, if any, on which you are relying.
You must sign the written protest, stating that it is true, under the penalties of perjury. If your representative prepares and signs the protest on your behalf, they must use the applicable penalties of perjury statement, which is based on whether they have personal knowledge of the information stated in the protest.
Minnesota Tax Disputes
Tax appeals can be filed directly with the Minnesota Tax Court or with the Minnesota Department of Revenue. Appeals must be filed within 60 days of the tax order date, although you may request an extension of 30 days in writing.
Tax appeals filed directly with the tax court instead of via the administrative appeals process are heard by the small claims division if the tax amount is less than $15,000. Your appeal will be heard by the regular division if there is a higher amount in controversy.
Pretrial Resolution and Advocacy During Litigation
Tax disputes can often be resolved without going to court. To avoid litigation and move on, we routinely negotiate tax deferrals, reduced assessments, installment plans, offers in compromise, abatement of penalties and interest, and other remedies with IRS examiners and IRS attorneys.
Sometimes tax burdens are too high or the IRS makes mistakes in assessing taxes or applying the law. In addition to pre-assessment cases in U.S. Tax Court, we have successfully litigated disputes over tax refunds and Trust Fund Recovery Penalty (TFRP) cases in U.S. District Courts. The lawyers at our firm will give you their honest assessment of your position and the merits of pursuing a settlement or going to trial. We also step in to fight for our clients when the IRS threatens criminal prosecution.
Who Can Represent Me During My Tax Appeal?
It is important to note that taxpayers can only be represented by attorneys, certified public accountants, or enrolled agents during IRS Appeals. Unenrolled preparers may attend the conference as witnesses, but not as representatives.
A tax litigation attorney can help you pursue your best defense if a state tax audit or IRS investigation reveals a tax liability or leads to a criminal investigation. In the event that your tax dispute cannot be resolved at the audit or appeal level, your attorney can assist you in protecting your assets. Tax attorneys skilled in litigation can help reduce your liability and protect your rights when it comes to dealing with these complicated and potentially life-changing cases.
Why Should I Hire Pridgeon & Zoss, PLLC, to Handle My Tax Dispute?
If you are disputing the amount of your Minnesota or federal tax liability, arrange a consultation with Pridgeon & Zoss, PLLC. During professional tax careers that span more than 70 years, attorneys Mark Pridgeon and David Zoss have successfully represented clients in tax disputes ranging from hundreds of thousands of dollars and more.
Our firm works daily with tax authorities and appeals officers at the Minnesota IRS office, as well as the Minnesota Department of Revenue. Upon reviewing your returns and records, we will give you an honest assessment of whether you have legitimate grounds to appeal the federal or state tax authority’s findings or can pursue litigation.
After years of working with personnel at the IRS and Minnesota Department of Revenue, we understand how tax officials interpret and apply the law regarding income, deductions, and credits. It is not unusual to discover that they sometimes overstep federal and state tax law, possibly leaving their disputed decisions open to appeal or litigation.
How Do I Know if I’m Eligible to File a Tax Appeal?
If you meet all the conditions below, you are in a position to file a tax appeal with the IRS or Minnesota Department of Revenue.
- You disagree with the agency’s decision and have proof to support your position. For example, they are disallowing a large deduction and you can prove that it’s a valid one.
- You have received a letter from the IRS or MDR explaining your right to appeal.
- You’ve received an agreement form but aren’t willing to sign it.
- You disagree with the agency’s decision because it is incorrect, not because you cannot pay it.
If you aren’t sure about your ability to file an appeal, contact Pridgeon & Zoss, PLLC, for a no-obligation consultation and case review.
What if I Can’t Afford to Pay the Assessed Tax Amount?
Inability to pay is not grounds for initiating state or IRS disputes. You can still benefit from the services of a tax lawyer, however. Depending on factors like how much you owe and to whom, we can help you negotiate a payment arrangement like an offer in compromise, in which you settle your tax debt for a more manageable amount or an installment agreement.
As an example, if you owe an IRS debt, your payment options include those highlighted below.
- Guaranteed Installment Agreement: If you owe $10,000 or less, you may apply for a guaranteed installment agreement, provided you have filed and paid all taxes for the past five years. Payment must be made in full within three years and you must agree to comply with all tax laws during this time.
- Streamlined Agreement: You may qualify for a streamlined installment agreement if you owe $50,000 or less. The balance must be paid within 72 months or before the collection statute of limitations expires.
- Trust Fund Express Installment Agreement: Your business can qualify for an in-business trust fund express installment agreement if you owe $25,000 or less in business taxes. In the event that you owe more than $25,000, you can make a lump sum payment to bring the total down to this threshold. The payment term for this agreement is 24 months.
- Negotiated Installment Agreements: If you owe more than $100,000 or cannot pay your tax debt within the mandated period, you may negotiate an installment agreement. The process includes providing information about your income, assets, debts, and expenses.
Offer in Compromise
With an offer in compromise (OIC), a taxpayer and the IRS agree to settle the tax obligations for less than what is owed. Your offer must equal or exceed what the IRS could reasonably hope to collect from you in order for it to settle your liability. In cases where the amount of your liability is in doubt, the IRS may accept an OIC based on what the correct tax total should be. You will need to present financial documentation to prove your case.
Payment arrangements can provide you with critical relief during state or IRS disputes, but they require a lot of research and careful presentation. At Pridgeon & Zoss, PLLC, we can help you propose and negotiate a payment arrangement that resolves your tax burden without depriving you of the money you and your family need to live on.
Will a Payment Arrangement Remove a Tax Lien?
Yes. Both the IRS and the Minnesota Department of Revenue have different payment options for helping you eliminate a tax lien.
If you enter into an installment agreement or Offer in Compromise with the IRS, your federal tax lien is automatically lifted within 30 days after you pay the balance in full. The Minnesota Department of Revenue will release a lien after it is paid in full with secured funds. If you pay any other way, it is released 30 days from the day payment is received. Your Minnesota tax lawyer can help you negotiate for the release of a lien from your property.
My Spouse Handled Our Taxes. What Can I Do?
Individuals are usually responsible for their own tax returns, taking full responsibility for any errors or fraud. Married couples, however, have the option to file their taxes jointly. While convenient, joint filing can cause issues if the filing spouse commits tax fraud or makes major mistakes on the returns, both parties may be held liable.
Fortunately, the IRS has a procedure for resolving such situations with family members. Under the Innocent Spouse Rule, it acknowledges that one taxpayer on a joint tax return can commit a tax crime without the other’s knowledge or consent. In order to establish your innocence, you must prove beyond any doubt that:
- Your partner is responsible for all fraudulent items on a joint tax return.
- You had no knowledge of or reason to suspect misconduct.
- A consequence that does not result from your actions would be unfair.
To claim innocent spouse relief, you must file IRS Form 8857. After reviewing your case, the IRS may agree to remove the charges from your record. Partial pardons can allow you to file a separate tax return that includes only your income and liabilities. Your tax appeal lawyer can guide you through the process of filing for relief and avoiding penalties you did not knowingly incur.
Former IRS Tax Lawyers · More Than 70 Years of Combined Tax Law Experience
“After years of working with personnel at the IRS and Minnesota Department of Revenue, we understand how tax officials interpret and apply the law regarding income, deductions, and credits. It is not unusual to discover that they sometimes overstep federal and state tax law, possibly leaving their disputed decisions open to appeal or litigation.” – Attorneys Mark Pridgeon and David Zoss
If you are facing or already deeply involved in a federal or state tax controversy, reach out to the team at Pridgeon & Zoss, PLLC, today. Our Minnesota tax dispute attorneys can advise and represent you in all aspects of your tax litigation dispute and will work with you to resolve it as favorably as possible.
Our firm offers a range of services in all areas relative to tax liability disputes, including:
- Offers in compromise and tax settlements
- Tax appeals
- Tax litigation
- Preparations for audits
- Reduction of penalties and fines
- Responding to tax notices
- Innocent spouse tax relief
- Addressing unfiled tax returns
- Responding to tax notices
- Innocent spouse tax relief
- Tax lien, bank levy, wage levy, and garnishment
- Property seizures
- Abating penalties and interest
- Obtaining tax refunds
- Defending against the application of the Trust Fund Recovery Penalty
From offices in Edina and Roseville, we advise and represent clients in communities throughout Minnesota and western Wisconsin. If you are facing a significant tax liability, contact the firm for a free half-hour initial consultation with a tax dispute attorney at Pridgeon & Zoss, PLLC, today. Let us learn about your tax problem so we can explain your options and help you decide the best way forward.