Tax Controversies

If the taxpayer:  (i) files an Indiana tax return with a balance due and without payment; or (ii) does not resolve the delinquent Indiana taxes at the proposed assessment stage (payment or protest), then the Indiana Department of Revenue (“IN-DOR”) will issue a Demand for Payment (“AR-40”). Within twenty (20) days of the date of the AR-40:  (i) full payment must be made to the IN-DOR; or (ii) payment arrangements must…

The Federal Tax Lien (“FTL”) facilitates the collection of delinquent taxes.  The FTL is an encumbrance, on the property, of the delinquent taxpayer, providing security for payment of the tax delinquency. After Notice and Demand for Payment, if the taxpayer fails to pay the tax assessment, then the amount of the tax assessment, including any interest and penalties, becomes a FTL and automatically attaches…

The Internal Revenue Code requires that the Internal Revenue Service (“IRS”) comply with fair tax collection practices, similar to the protections provided by the Fair Debt Collection Practices Act, which governs private creditors and their customers. The IRS is subject to restrictions governing communications with taxpayers and prohibitions on a variety of abusive collection processes and harassment techniques.  For example, the IRS cannot communicate with the taxpayer at…

In general, the Internal Revenue Service (“IRS”) should only issue a Summons when the desired documentation or other information cannot be obtained voluntarily.  When the desired documentation or other information can be obtained voluntarily, then a Summons is likely not appropriate. Before issuing a Summons, the IRS should consider:  (i) the possibility that judicial enforcement will be necessary; and (ii) the adverse effect on future voluntary…

A Certificate of Release of Federal Tax Lien (“Release”) is a public notice that indicates that the tax liability is no longer owed.  However, the Release does not remove reference to the filing, of the corresponding Notice of Federal Tax Lien (“NFTL”), from the public record.  Consequently, even though the tax liability has been resolved and the Release has been obtained, a third (3rd) party…

If the Indiana Department of Revenue (“IN-DOR”) reasonably believes that the taxpayer has not reported the proper amount of tax due, then, based on the best information available, it shall make a proposed assessment, of the amount, of the unpaid tax, and issue a Notice of Proposed Assessment (“AR-80”). The taxpayer may challenge the AR-80, by filing a written protest (“Protest”),…

As soon as practicable after a tax return is filed, the Illinois Department of Revenue (“IL-DOR”) shall examine the tax return to determine the correct amount of tax.  If the IL-DOR  finds that the amount of tax shown on the tax return is less than the correct amount, then a Notice of Deficiency (“NOD”), which shall set forth the amount…