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Do I need a tax attorney? IRS Audit indicates huge back taxes resulting from debt forgiveness on short-sale.

Sacramento, CA |
Filed under: Debt Short sales Tax law

We were forced to move for work and couldn't sell the house. As such, we rented it for 9 months in order to avoid forclosure. Taxes were prepared by HRB and they've been working with IRS. They have not yet "appealed", but I would like to know if its time to cut them loose and hire a tax attorney. Thanks in advance.

Per the first reply (thanks!), I thought it prudent to indicate that the HRB reprentative is an EA. His services came as a result of HRB's Audit Defense protection.

Attorney Answers 3

Posted

You probably need to a have professional review your tax returns and audit notices, and determine if you are being properly represented.

Good luck!
Phillip M. Smith Jr.
Los Angeles Tax & Business Attorney
Licensed in the United States Tax Court
www.culvercitytaxandbusinesslaw.com
www.corporateattorney.com
www.worlclasslawyers.com

THESE COMMENTS ARE NOT LEGAL ADVICE. They are provided for informational purposes only. Actual legal advice can only be provided after consultation by an attorney licensed in your jurisdiction. The answer to question does not create an attorney-client relationship or otherwise require further consultation. Mr. Smith is licensed to practice law throughout the state of California with offices in Los Angeles County. He is authorized to handle IRS matters throughout the United States, and is also licensed to practice before the United States Tax Court. His phone number is 323-292-4116 or his email address is philsmithjr@worldclasslawyers.com.

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Asker

Posted

Thanks for the reply. I appreciate it. Should I clarify that the HRB rep is an EA? Would that change your suggestions? Thanks

Phillip Monroe Smith

Phillip Monroe Smith

Posted

It depends on the qualify of the service of the EA.

Asker

Posted

From my lay-perspective, he seems aloof, disorganized, casual, and not very communicative. He was assigned by the Audit Defense(?) protection, but claims to have dealt with IRS "1,000s of times". Don't want to pull the plug prematurely, as I am hoping they will honor their "guarantee" and pay their (paltry) portion. My feeling is to let it play out a little longer and let him deal with an appeal, however, I don't know if we only get one shot at it. Again...thanks for your help, and time...I know it is valuable.

Phillip Monroe Smith

Phillip Monroe Smith

Posted

Your appeal involves representation in the US Tax Court once you receive a "Deficiency Notice." At the point you would be better off retainer a tax attorney. It also depends on the amount of money involved.The higher the assesment , the better professional help you need to seek.

Asker

Posted

My letter indicates "...we recommend you request a conference with appeals officer." It later states "IF YOU DO NOT RESPOND...(then) we will issue a notice of deficiency". Is this "one in the same" or is the first round of "appeals" different than being issued a notice of deficiency. I'm sending good Karma your way for your help!

Phillip Monroe Smith

Phillip Monroe Smith

Posted

This is not a Deficieny notice aka "90 day letter." You would want to resolve the matter in appeals. The question is whether you have the right representation to accomplish this.

Asker

Posted

Understood...and agree. Thanks for your help!

Posted

You should really hire a competent tax attorney who is experienced in audits and appeals. Often accountants are ill equipped to handle tax controversies. A competent attorney can be well worth the price. Please let me know if I can be of any further assistance.

Andrew B Gordon, Esq., CPA
Www.ILtaxattorney.com

Andrew B Gordon is a CPA and attorney licensed to practice law in Illinois. The information provided here is for educational purposes only and is not intended as legal advice for a particular matter. This response does not create any attorney-client relationship with the author. For specific advice about your particular situation, please consult an attorney.

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Asker

Posted

Thank you for your input. I sure appreciate it.

Posted

Most tax services are ill equipped to handle your tax controversy matter and are in a conflict of interest with you to begin with. Hire a competent tax attorney to represent you or at least review what has been done already. It will be well worth the money spent.

Call me if you would like a free consultation to review your situation or just talk about this further.

H. Daniel Lively, Esq., LL.M., CPA Certified Tax Specialist, CA Board of Legal Specialization dlively@livelylawgroup.com www.USTaxRescue.com 714-708-2593 Mr. Lively is a Certified Tax Specialist by the State Bar of California Board of Legal Specialization. He can be reached at 714-708-2593 or USTaxRescue.com.Any individual seeking legal advice for their own situation should retain their own legal counsel as this response provides information that is general in nature and not specific to any person's unique situation. Circular 230 Disclaimer - Advice given in this response cannot be used to eliminate penalties with the IRS or any other governmental agency.

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Asker

Posted

Thank you for your help. I sure appreciate it. And thanks for the offer...I may take you up on it.

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