Tax Is The Scourge For Most People IN The World

2009-07-19T19:21:00.000-07:00

TAX is the scourge for most people World Wide.

In the USA for instance the following information is imperative for the Taxpayer who wants to be treated correctly, by its Inland Revenue Services

The IRS will take advantage of a taxpayer who is not knowledgeable about the tax law or IRS audit and collection procedures. Taxpayers need to be protected from IRS error, abuse, and intimidation. Taxpayers frequently overpay their tax liability either as a consequence of inappropriate IRS actions, or because they do not have the counsel of a skilled and experienced tax lawyer.

IRS ABUSES, LEVERAGE AND INTIMIDATION

The Internal Revenue Service is adept at using leverage to intimidate, coerce and bluff taxpayers and their representatives into adverse collection and examination determinations based upon weak legal authority and incomplete or insufficient facts. The IRS will “roll-over” taxpayers and weal representatives who are not familiar with taxpayer rights and lack of knowledge about the nuances of the tax law. The IRS enforced collection actions are extreme, and they mostly abuse the intent of the Congress not to refrain from collection actions that create an economic hardship within the meaning of §6343 of the Internal Revenue Code.

The IRS agent is both "prosecutor" and "jury." The IRS agent raises issues and comes to conclusions that are presumed to be correct under present law. Also, taxpayers, not the IRS agent, must prove the accuracy of their deductions.

This leverage against a taxpayer applies even if the agent uses incorrect or incomplete facts or makes determinations on erroneous or flawed argument and law. It is not unusual for the IRS to tax extreme positions on the factual and legal issues. The agent can be sloppy and incompetent and still get a large and unjustified tax deficiency. The raw power of the agent’s position and presumption of correctness is intimidating to taxpayers and intimidating to the representatives of the taxpayer who do not have the skill or ability to identify and advocate the factual and legal issues for their clients. The "intimidation" of the IRS agent is used as a tool to close cases quickly.

SELECTING YOUR IRS REPRESENTATIVE

Tax professionals in a local tax practice (CPAs, accountants, enrolled agents, attorneys) have an inherent “conflict of interest” for aggressive representation of any one client because they do not want to antagonize the local IRS revenue officer or examiner in a way that will have a negative impact on their other clients. The IRS will take advantage of the timid local practitioner who finds it necessary to generate a positive image for the balance of his client base.

CPAs, accountants, bookkeepers, enrolled agents, and attorneys without a tax specialty may not have the time, experience, education, insight or technical skill to deal with the technical analysis, legal research, identification of issues, interpretative creativity and insight, negotiating skills, knowledge of the IRS , or technical writing ability necessary to effectively prevent avoidable tax overpayments. The person who prepares your tax return may only have six weeks of training, and that training may be limited to how to put numbers into an IRS income tax return. Your bookkeeper is not a tax expert. Your CPA prepares tax returns for approximately three months out of the year and spends the balance of the time preparing books, records, and financial statements. Most, if not all enrolled agents are not tax lawyers. Attorneys may have a general or a specialized practice that does not include tax issues and problems. Nevertheless, accountants, CPAs, bookkeepers, enrolled agents, and non-tax attorneys will usually agree to represent you if you approach them with a tax issue even if they do not have the training or experience to handle difficult, complex, or creative tax issues. The IRS can be expected to take advantage of those representatives who are not specialists in the tax law and who do not deal with the IRS on a full-time basis.

A tax attorney can do something an accountant cannot do. An experienced tax attorney can thoroughly research a tax statute and master it. He will know its legislative history. He will be familiar with the Treasury regulations and IRS rulings on that statute. He will penetrate the many court decisions involved in the litigation of the tax statute. He will have read tax articles and books that deal with the tax statute. It is improbable that your accountant has the training or experience that would permit him to penetrate the complexity of the tax law on a particular tax issue. It is also not likely that the accountant can take the time out of a busy accounting practice, working with numbers and preparing financial statements, to master the vast array of difficult tax law that bears on a tax statute.

Even worse is the fact that the mind-set of an accountant is to see "black and white" rather than the "gray" because they are trained to be precise with numbers. Tax law is drenched with ambiguity where there is mostly no answer that is right or wrong. Tax lawyers are trained to seek and find the ambiguity in the law (i.e., the "gray"). Tax law ambiguity can be used as a "sword" to attack and IRS position and also as a "shield" to protect the taxpayer.

However, not all tax attorneys are equal just as, for example; professional golfers have difference levels of skill and ability. Tax attorneys have different levels of creativity, insight and skill.

The most important attribute of a good tax attorney is to be "creative" with the tax law. This creativity may arise in many ways. A creative tax attorney will use interpretative skill to find support of a taxpayer position. A creative tax attorney will find a gap in a statute or a regulation (a "tax loophole") that permits favorable tax treatment in situations not covered by the statute under consideration. A creative tax attorney will be able to identify inconsistencies by the IRS in its published positions or private ruling letters. A creative tax attorney will use interpretative skills to spin facts, case law, regulations in favor of the taxpayer. Creativity is unlimited in its potential to interpret and apply the law or the ability to develop that knowledge through research skills.

Any attorney is a better representative than a non-attorney because “taxes” is based on law written by the Conges and non-attorneys are not trained to research and interpret tax law. As between two attorneys, a specialist in taxes is a better choice as the result of superior training and experience. As between to tax attorneys who both specialize in IRS problems and controversies, a firm that has IRS experience, as we do, have better insight to the inner workings of the IRS. Knowledge of the administrative processes of the IRS is a distinct advantage in choosing your representative.

In explaining what a tax lawyer does that other representatives cannot do, it is helpful to understand what is meant by a legal issue. Legal issues are developed from expert creative analytical, interpretative, and technical research skills. Technical research includes: determining Congressional intent from the legislative history of the tax law; a search and analysis of the provisions of the applicable provisions of the Internal Revenue Code, Treasury tax regulations, IRS revenue rulings, private letter rulings and procedures and the IRS administrative procedures and guidelines..

The fact that tax law is complex and arcane is well known. This complexity is the reason a qualified tax attorney is in a superior position to protect a taxpayer from overpaying a tax liability - provided that attorney has strong creative, analytical and interpretative skills. Interpretative and analytical skills involve the sophisticated ability to read tax legislation, regulations, cases and other authority to identify subtle distinctions, ambiguity or supportive facts, issues, and argument.

DELEGATION OF AUTHORITY TO AN EXPERT AND IRS EXPERIENCED TAX ATTORNEY

Regardless of your location or taxpayer identity, a Power of Attorney on IRS Form 2848 permits you to be represented by a tax attorney with comprehensive IRS National Office technical, administrative and procedural experience.

Article Written By

Andrew Smith Uk

Tax Attorney New York

Tax Is The Scourge For Most People IN The World