Businesses and individuals with complex international tax compliance problems, substantial tax liabilities owed to the Internal Revenue Service (IRS) and/or Massachusetts Department of Revenue (DOR), one or more years of unfiled returns, and/or audit notices from the IRS or DOR will often need the help of an experienced tax attorney to navigate the complex landscape of federal, state, and international tax laws. If you are a business or an individual that is facing a serious federal, state, or international tax matter, KCL can assist you in (a) determining your exposure to additional tax, interest, and penalties and (b) creating and implementing a strategy to pay that liability in full or to settle that liability for less than the full amount due.
KCL offers the following tax controversy services:
- International Tax Controversies: We help individuals come into compliance with their United States income tax and information return reporting requirements (e.g., FBAR [Foreign Bank Account Report/FinCEN Form 114], Form 8938, Forms 3520/3520-A, Forms 5471/5472) through the IRS Offshore Voluntary Disclosure Program (OVDP) or the IRS Streamlined Filing Compliance Procedures (both for residents and non-residents of the United States).
- Non-Filer Services: If returns have not been prepared or filed for one or more tax periods, then we can arrange for the preparation of those returns or review those returns that have already been prepared by you or your tax preparer.
- Business and Individual Tax Audits: If you or your business is under audit, then we can perform the following services:
- Conduct a pre-audit to determine the exposure to additional tax (e.g., income tax; payroll tax; Massachusetts sales, use, or meals tax);
- Estimate the approximate amount of additional liability; and
- Present your tax and financial information to the IRS and/or DOR clearly and efficiently.
- Collection Defense: IRS and DOR collections procedures can seriously hinder a business’s or an individual’s financial growth and independence. Not only can the IRS and DOR levy bank accounts and wages, but they can also seize business and personal assets. If you or your business has been assessed an additional tax liability, and you do not have the ability to pay that liability in full, then we will review your or your business’s financial situation to determine whether an installment agreement, Offer in Compromise (Offer in Settlement for the DOR), or “currently non-collectible” status would be a viable option.
- Massachusetts Domicile Audits: Determining an individual’s “domicile” for Massachusetts income tax purposes involves an exhaustive analysis of all the facts and circumstances surrounding that individual’s family, social, economic, political, and religious ties. If you have been selected for a Massachusetts domicile audit, then we can review the evidence to
- (a) determine your exposure to additional Massachusetts income tax, interest, and penalties and (b) develop a strategy for clearly presenting your case to the DOR auditor.
- Innocent Spouse Relief: If you have been assessed additional tax by the IRS and/or DOR and you believe that your spouse should be held solely responsible for that liability, then you may be eligible for innocent spouse relief. If you meet the threshold legal conditions, then we can prepare a Form 8857: Request for Innocent Spouse Relief—or a Massachusetts Form 84: Application for Relief from Joint Income Tax Liability—to petition for innocent spouse relief on your behalf.
- Penalty Abatement: If you and/or your business has been assessed tax penalties, and those penalties are attributable to reasonable cause rather than willful neglect, then we can request abatement of penalties and interest that has accrued on those penalties.
- Tax Litigation: If we cannot resolve your tax controversy through standard administrative (non-litigation) channels, then we can petition the appropriate forum (e.g., U.S. Tax Court, Massachusetts Appellate Tax Board, Massachusetts Probate and Family Court) for relief and represent you throughout the entire tax case, including any subsequent appeals.
KCL can assist the following clients:
- Expatriates, permanent U.S. residents, and “substantial presence” U.S. residents with undisclosed foreign income and assets who wish to come into compliance with their U.S. income tax and information return requirements;
- Businesses under audit by the DOR for sales tax, use tax, or meals tax returns and that have significant exposure to additional tax, interest, and penalties;
- Businesses under audit by IRS and/or DOR for income tax returns—including partnership and corporate excise tax returns—and that have significant exposure to additional tax, interest, and penalties;
- Businesses under audit by IRS and/or DOR for payroll tax and/or unemployment tax;
- Business and individual non-filers, including those whose failures to file and pay are attributable to reasonable cause;
- Individuals and businesses whose tax deficiencies are attributable to inadequate accounting or bookkeeping controls;
- Individual and business taxpayers who need representation before IRS or DOR Collections;
- Individual taxpayers subject to a domicile audit by the DOR; and
- Individual taxpayers who have been assessed additional income tax as a result of their spouses’ erroneous under-reporting of income or over-reporting of expenses (“innocent spouses”).