Experienced Texas Tax Attorneys Providing Representation for Licensed Tax Professionals
As a licensed tax professional, successfully defending against allegations of negligence, fraud or other misconduct can be critical for protecting your finances, your reputation and your career. Whether you are facing scrutiny from the IRS or you need to defend against allegations in a disciplinary proceeding or civil litigation, you need to defend yourself by all means available. This means that you need a team of experienced Texas tax attorneys who can provide effective representation while also providing the advice you need to make informed and strategic decisions.
We have extensive experience representing and advising licensed tax professionals in high-stakes civil, criminal and disciplinary proceedings. If you are facing scrutiny in your tax practice, we encourage you to contact us promptly. A Texas tax defense attorney at Brown PC can get to work on your case immediately if warranted, and we can use our capabilities and resources to help you target a favorable resolution as quickly and quietly as possible.
5 Examples of Defense Strategies for Tax Professionals
For licensed tax professionals, presenting an effective defense during an investigation, disciplinary proceeding or litigation requires a clear and comprehensive understanding of both the relevant facts and the relevant law. Every charge or allegation will require its own custom-tailored defense strategy, and there is no single “right” way to defend against any particular claim of impropriety.
With this in mind, here are five examples of potential defense strategies for tax professionals facing IRS investigations:
1. Compliance with the Internal Revenue Code (or Other Applicable Authority)
Of course, one way to defend yourself is by demonstrating that your advice to your clients fully complies with the Internal Revenue Code (IRC). In some cases, the IRS’s scrutiny simply isn’t warranted. If your Texas tax defense attorney can show that you have complied with the IRC (or other applicable authority), this should be enough to resolve the IRS’s inquiry without further consequence.
2. “Reasonable Basis” for the Tax Position Taken
When defending disclosed tax positions, licensed tax professionals can also avoid further consequence by demonstrating a “reasonable basis” for the position taken. The IRS classifies “reasonable basis” as, “a relatively high standard of tax reporting,” and asserting this defense effectively requires highly experienced legal representation.
3. “Substantial Authority” for the Tax Position Taken
The same is true of presenting the defense of “substantial authority.” When defending an undisclosed tax position, a licensed tax professional must be able to demonstrate “substantial authority” for the position rather than a “reasonable basis.” Thorough documentation is critical—as is the ability to convince the IRS that further enforcement action is unwarranted.
4. Good-Faith Reliance (Adequate Due Diligence)
Good-faith reliance can also be an effective defense in some licensed tax professional investigations. The IRS will consider two types defenses based on good-faith reliance in appropriate cases:
- Good-Faith Reliance on the Client’s Representations – If a licensed tax professional conducts adequate due diligence and relies on a client’s false or misleading representations in good faith, this reliance can serve as a defense to the IRS’s allegations of aiding and abetting, fraud, or other misconduct.
- Good-Faith Reliance on the Advice of Tax Counsel – Good-faith reliance on the advice of tax counsel can be a sound defense as well. This includes, but is not limited to, tax counsel’s opinion on the “reasonable basis” or “substantial authority” for a position taken.
5. Insufficient Evidence of Noncompliance
To pursue charges against a licensed tax professional, the IRS must have sufficient evidence to substantiate its allegations. As a result, if your Texas tax defense attorney can demonstrate that the IRS’s evidence is insufficient to prove noncompliance, this can be enough to stop the IRS from moving forward.
The Importance of Experienced Legal Representation for Licensed Tax Professionals
Facing allegations of negligence, fraud or other misconduct can present multiple risks for licensed tax professionals. One legal proceeding can lead to another, and licensed tax professionals can quickly find themselves facing litigation on multiple fronts. Thus ensuring that you have experienced legal representation can be crucial for:
Avoiding IRS Penalties
The IRS has the authority to directly impose certain penalties on licensed tax professionals, including civil monetary penalties and suspension or revocation of enrollment with the IRS.
Avoiding Criminal Charges
IRS investigations also can (and do) lead to criminal charges in many cases. Licensed tax professionals accused of aiding and abetting, fraud, and other crimes can face substantial fines and prison time.
Avoiding Civil Liability
In many cases, IRS investigations will also trigger lawsuits from the clients involved. Even if you have professional liability insurance, asserting an effective defense will be critical for your long-term protection.
Avoiding Professional Discipline
IRS investigations, criminal charges and civil lawsuits can also lead to professional discipline. If your license is in jeopardy, you will need an experienced Texas tax defense attorney to represent you in your disciplinary proceeding as well.
How Our Texas Tax Attorneys Can Help
At Brown PC, we have decades of experience defending licensed tax professionals in extremely high-stakes matters. If you are facing scrutiny, here are just some of the ways our Texas tax attorneys can help:
- Gaining a clear and comprehensive understanding of the specific allegations at issue and their potential ramifications.
- Quickly assembling a defense team and formulating a defense strategy focused on resolving the matter without litigation.
- Communicating with the IRS on your behalf and asserting all viable defenses, and ensuring that we have a clear understanding of the IRS’s next steps.
- Helping you make informed decisions when facing considerations like whether to pursue settlement or start preparing for trial.
- Representing you in civil, criminal and/or administrative litigation as necessary.
Request a Consultation with a Texas Tax Defense Attorney at Brown PC
If you would like to speak with a Texas tax defense attorney at Brown PC, we invite you to get in touch. To request an appointment, please call 888-870-0025 or request a consultation online today.