AB Tax Reduction Services

Alvin Brown and Associates, doing business as ABA Tax Reduction Services and Tax Legislative Services. Former Tax Attorney-Manager in the Office of the Chief Counsel at IRS National Office, Washington, DC; Tax Consulting and Legislative Services in 50 States.

Phone: (703) 591-1035
Fax: (703) 591-6295
e-mail: info@irstaxattorney.com.

Links to State and Federal Tax Forms

IRS LEVERAGE AND OVERTAXATION

The Internal Revenue Service is adept at using leverage to intimidate, coerce and bluff taxpayers and their representatives into adverse tax determinations based upon weak legal authority and incomplete or insufficient facts.

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. When the agent uses incomplete or weak facts and weak legal authority against a taxpayer - it is a "bluff." The agent can be sloppy and incompetent and still get a large and unjustified tax deficiency. The raw power of the agents position and presumption of correctness is intimidating to taxpayers - more importantly, it is intimidating to the representatives of the taxpayer who do not have the skill or ability to identify and expose the "bluff." The "intimidation" of the IRS agent is used as a tool to close cases quickly. It is well documented that the IRS has a high error rate. Accordingly, taxpayers significantly overpay their tax liability, penalties and interest.

AB Tax Reduction Services protects taxpayers by reducing or eliminating redundant tax liability, penalties and interest. We specialize in exposing defective IRS tax determinations.

If you are a sports fan, you know how a defensive football line matches up against the offensive football line. One or the other can dominate and win the game. There is a similar match-up between the IRS agent and your tax attorney. An IRS agent is generally an accountant who has not been to law school. The agent has a high case load with limited experience and perhaps eight weeks of training at an in-house IRS training facility. Note that the IRS has made substantial reductions of its employees and is generally understaffed. Match that agent up with a trained and experienced tax attorney who has: superior education and tax knowledge; superior interpretative, analytical, writing and research skills; many years of high-level IRS Chief Counsel experience; knowledge of IRS thinking; no pressure to close the case and resolve issues; and who is prepared to pursue all administrative and legal remedies. We are prepared to identify and rebut adverse tax determinations of the IRS based upon incomplete facts and flawed argument and law. If anything, this match-up is intimidating to the IRS agent.

Call AB Tax Reduction Services before you settle with the IRS when you think that you have no other alternative. It is best to call us as early as possible on difficult, serious or important tax matter so that we can maximize use of all administrative procedures and legal remedies. However, even if an adverse tax determination is in collection, tax liability can be reduced and even eliminated in some cases.

STOP OVERPAYING YOUR TAX LIABILITY!

There is no way to say this nicely - a great deal of the representation of taxpayers by trusted professionals and so-called "tax experts" is inept. Consequently, taxpayers vastly overpay their tax liability.

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. Unqualified representatives are easily coerced, bluffed and intimidated into tax settlements or adverse determinations that should be contested. Even worse is the representative who is unable to identify a tax issue, tax law or fact that supports and justifies a reduced tax liability or penalty.

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.

Taxpayers are "captive clients" of the CPA or the family attorney. The representative has earned the respect and trust of his client for prior meritorious performance on other matters, and the client has come to rely on the representative for all purposes. Therefore, "captive clients" are subject to tax assistance by individuals who may not offer competent tax law services.

Why would a person who is not a tax law expert try to represent you on a complex tax issue or important transaction? The answer is - "money." Taxpayers are billed if his representative meets with or speaks with IRS personnel. If the representative agrees with the IRS, the agreement can be passed of as your legitimate agreed upon tax liability. You pay a fee to your representative even if that person is unaware that there are issues and argument that would have reduced your tax liability. The representative, in effect, "churns" his clients by closing the matter with the IRS as quickly as possible in order to collect fees from a new client. Unfortunately, some representatives have no clue that they are missing issues that could reduce or eliminate a tax liability.

Taxpayers will never know if a legal or factual issue was available to either reduce or eliminate tax liability. For example, if there is legal precedent for the elimination of a tax penalty under certain factual situations, neither the representative nor the taxpayer will know that the tax penalties and interest could have been avoided with successful research of the tax cases and effective legal argument. The representative is paid for his services even if those services are inadequate. The taxpayer/client is the only loser. The taxpayer could be required to pay a tax liability that can cost him his home, his business and his life savings. Even a taxpayer's freedom can be jeopardized if the taxpayer is the victim of an adverse fraud investigation that could be resolved for the taxpayer with the proper defense.

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 issues. 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.

CONSULTING FOR TAX CONSULTANTS

Anyone who holds themselves out to the public as a tax expert, owes the duty of the highest level of professional service. Any lesser service is either unprofessional, unethical or malpractice. In complex matters involving a full range of legal research, legal drafting, and interpretative analysis of tax law, it is appropriate to refer the matter to experienced tax lawyers who actively practice tax law. Similarly, in cases where the taxpayer has a significant financial risk, it is prudent to bring in a consultant to make sure that the taxpayer is fully protected from an unnecessary or an unreasonable tax liability.

In the case of a referral or consultation with a tax attorney, everybody wins. The taxpayer will be provided with quality services and in most cases, a reduced tax liability. The referring professional can bill their client in their own name and have more involvement because issues will be raised and remedies pursued. The tax attorney who receives the referral can represent the taxpayer directly or function as a subcontractor of taxpayer's representative.

AB TAX REDUCTION SERVICES OFFERS:

Aggressive, Creative, And Comprehensive IRS Audit Representation To Prevent IRS Abuse, Error, Bluff And Intimidation.

Identification Of Argument Favorable To Taxpayer And Development Of Factual And Legal Issues To Reduce Tax Liability.

Comprehensive Tax Law Research, Technical And Interpretative Analysis.

Drafting Of Technical Memoranda, Rationale, And Supporting Authority, Including Protests For Appeals.

Audit Strategy And Defense.

Procedural Remedies Including Appeals And Conferences

Negotiations At All Levels.

Closing Agreements Under Section 7121 Of The Code To Protect Taxpayers From Inconsistent Treatment Or Bind the IRS To A Negotiated Settlement.

Tax Penalty And Interest Defense, Reduction, Abatement Or Elimination.

Collection, Levy, Seizure And Lien Protection And Defense.

Review Of The Mode Or Time For The Collection Of Any Tax, Notice And Demand For Taxes, Collection Liability, Release Of Lien, Discharge Or Seizure Of Property, Levy And Distraint, Surrender Of Property Subject To Levy, And Redemption Of Property.

Fraud Defenses.

Offers-In-Compromise To Reduce Final Tax Determinations And Penalties Where Doubt Exists As To Whether The Taxpayer Owes The Liability Or When There Is Doubt That The Liability Can Be Collected In Full.

Requests For Technical Advice and Determination Letters To Clarify The Interpretation And Proper Application Of The Tax Law, Treaties, Regulations, Revenue Rulings Or Other Published Precedents.

Requests For Private Letter Rulings From The IRS Associate Chief Counsel For Pre-Transaction Tax Determinations To Interpret And Apply The Tax Laws To A Specific Set Of Facts.

Planning For A Tax-Free Merger, Spin-Off Or Other Corporate Reorganization.

Requests For Accounting Method And Period Changes From IRS National Office.

Requests For Section 7805(b) Relief That The IRS Limit The Retroactive Effect Of The Revocation Or Modification Of a Letter Ruling Or Determination Letter.

Requests For Section 9100 Relief To Extend The Time For Making An Election Or Other Application For Relief Under Section 301.9100-1 Of The Income Tax Regulations.

Negotiated Settlements.

Preparation Of Installment Agreements For Tax Payments.

I nformal Consultation Or Advice.

Formation of Tax Exempt Charitable Organizations (e.g., Section 501©(3) Of The Internal Revenue Code).

Initiation Of Civil Damages Actions Against The IRS For Unauthorized Collection Actions, Failure to Release Lien and Unauthorized Disclosure of Return Information.

Court Appeals & Brief Preparation - U.S. Tax Court, The US. Court Of Federal Claims, Or The U.S. District Court.

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.

Harness the "good will" and inside knowledge of a former IRS Chief Counsel attorney. It is advantageous to know IRS personnel, how the IRS thinks, and what "bells to ring" in arguing the facts, the law, and if necessary, negotiating a settlement.

Tax attorney representation prevents IRS coercion, intimidation, abuse and bluff. An experienced tax attorney has more training, education, technical skill, experience and overall ability than an adverse IRS agent. The tax attorney can reverse intimidation, stop abusive actions, and prevent IRS bluff. Thus, the tax attorney is in a position to identify faulty logic, argue the correct law, and negate incomplete factual determinations.

Except of any reserved powers, you are relieved of the following burden:

Making appearances at any IRS office, including Washington, DC.
Preparation of responses to all IRS communications.
Confront and argue with IRS agents, supervisors, and conferees.
Pursuance of all administrative and procedural remedies. Each level of appeal creates a new opportunity to reduce tax liability.
Risk of malpractice for CPAs, Accountants, Bookkeepers, Enrolled Agents, and Attorneys who do not have either the time, education, technical skill, interpretative ability, experience or creative insight to effectively identify or resolve a complex or important tax issue.
Technical analysis, issue identification or development, research, drafting, strategy, settlements and undeveloped tax issues.
Surface the flaws in erroneous or weak IRS determinations on factual and legal issues.

LEGAL ISSUES DEVELOPED BY TAX LAWYERS

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 Internal Revenue Code; Treasury tax regulations; IRS revenue rulings, private letter rulings and procedures; IRS internal practice procedures and audit guidelines; case law; tax treatises; and tax articles.

A taxpayer representative must have the skill and experience to identify and interpret the applicable tax law and also find ambiguity and inconsistency in the law to protect a taxpayer from erroneously overpaying a tax liability. The same legal skill may be used to identify the tax law that will support a legal argument in favor of a taxpayer position.

Tax law is based upon legislation passed by Congress. No tax statute is comprehensive and complete. Congress cannot think of every issue that could arise under tax legislation and draft a comprehensive legislative answer for all potential technical issues.

All words have ambiguity. Hence legislation needs to be clarified. Tax law may be interpreted within the context of the statute or related tax statutes. The language of a statute may be interpreted by language in the reports of Committee on Ways and Means of the House of Representatives, the Senate Finance Committee, or the Joint Tax Committee. Legislative intent may also be discerned from Congressional debate or colloquy.

The language of a tax statute is further applied and interpreted by tax regulations drafted by the Treasury Department. Treasury regulations have significant ambiguity and require clarification. The IRS issues revenue rulings, private ruling letters, technical advice memoranda to District directors, procedures, guidelines and notices - all designed to clarify the tax law but in turn may be ambiguous or inconsistent.

Tax issues are litigated in the Tax Court, the Courts of Appeal, the Claims Court and the Supreme Court. Some issues have judicial precedent and others do not. Other than the Supreme Court, many courts come to opposite and conflicting decisions. All court decisions are limited by the facts and the legal issues in each instance - those distinctions raise interpretative issues.

The fact that tax law is complex and arcane is well known. This complexity is he 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.

Interpretative and analytical skills are creative when they identify unique authority and argument and ascertain the persuasive law and argument that permits a taxpayer to beat the IRS or reduce tax liability.

FACTUAL ISSUES

Similarly, it is helpful to understand the skill of a tax attorney in identifying and developing factual issues A tax attorney identifies, develops and creatively applies factual issues to defend and protect a taxpayer, to reverse an adverse IRS determination or to get a favorable tax settlement.

The IRS often makes determinations on incomplete facts, and it will not develop facts that reduce tax liability. The development of factual issues by an experienced tax attorney bears directly on the legal issues and can negate or mitigate tax liability.

SETTLEMENTS

Due to the proven high IRS error rate, aggressive audit determinations, and its desire to avoid litigation on weak factual and legal determinations, the IRS is willing to negotiate a settlement in a majority of the cases.

The IRS agent, the agent's Supervisor, and an Appeals Officer each have the power to negotiate a settlement and concede issues. Taxpayers have a unique advantage in an Appeals conference - the IRS does not have either the manpower or the inclination to litigate all cases.

Settlements increase commensurate with the strength of the facts, law and argument presented by your tax attorney. If the law and the facts are on your side, you will get a 100% settlement and not have any tax liability. In lesser cases, your tax attorney should be able to assess the strengths and weaknesses of your situation and get the best settlement for you in the circumstances. This is where the skill, knowledge and creativity of your attorney is demonstrated for your benefit and tax savings.

Inside knowledge of IRS thinking, procedures and personnel is advantageous in negotiating the best possible settlement. IRS agents have varying degrees of knowledge, skill and ability. Some agents are dogged while others careless or lazy. In most situations, agents are under time constraints and are anxious to move on to other taxpayers. The ability to size up the weaknesses of an IRS agent is an important ingredient of how tax issues are resolved or negotiated.

PENALTY & INTEREST ABATEMENT OR REDUCTION

There are three reasons to discuss penalties and interest. First, penalties and interest are commonplace and hugely expensive for the taxpayer. Second, most representatives do not contest penalties. Third, a qualified tax attorney is frequently able to get tax penalties and interest abated, reduced or eliminated using research, analytical and interpretative skills.

The law on the penalty provisions for substantial understatement of income tax is reduced to the extent that there is substantial authority or adequate disclosure and a reasonable basis for the understatement. Whether there is or was not substantial authority for the tax treatment of an item depends on the facts and circumstances.

The accuracy penalty (20% of the underpayment) is reduced if there is substantial authority or adequate disclosure and a reasonable basis for the understatement, or the underpayment was not due to either negligence or disregard of rules or regulations.

The 25% penalty for failure to file a tax return or to pay tax will be abated if failure id due to a reasonable cause and not due to willful neglect.

Criminal prosecution and conviction may occur for tax evasion, willful failure to file a return, supply information or pay the tax due, fraud and false statements, or preparing and filing a fraudulent return. The 75% criminal penalty will be abated where taxpayer establishes there was no tax evasion, no willful failure to file a return, supply information, or pay any tax due; no fraud or false statement; and no preparation and filing of a fraudulent return.

In case of an underpayment, the fraud penalty will be abated if it is established by a preponderance of the evidence that the underpayment is not attributable to fraud. The IRS must prove fraud by clear and convincing evidence.

Because there are so many "terms of art" in the penalty provisions, as indicated by the italics, an expert tax attorney is mandatory to research the substantial case law and precedents. For example, there are regulations and a large body of case law that interpret words such as reasonable cause and willful neglect. The economic cost to the taxpayer to too large to leave the practice of tax law by anyone other than a tax attorney who is trained to research these and other tax law issues.

LOBBYING SERVICES

Services are offered to help navigate the legislative hurdles of the House Ways & Means Committee and the Senate Finance Committee.

Tax legislation ("spending legislation") can be facilitated for the benefit of any taxpayer or association if it is paid for by offsetting tax legislation that raises revenue ("revenue raisers"), providing the revenue raisers are politically acceptable and tax neutral. The revenue raisers are designed to close "tax loopholes: or improve tax compliance - hence, they improve the efficiency of existing law. Thus, the combined tax neutral legislation may not be rejected because there are no budgetary funds to pay for that beneficial spending legislation.

Example: Industry X wants a $25 million tax benefit. We will provide Revenue Raiser tax legislation that will raise $35 million in new revenue. The excess $10 is a gift to any sponsoring member of the tax committee for other legislative purposes, and it provides an inducement to sponsor the legislation. The $35 million is raised by improving existing tax law and is devoted to new legislation that will add stimulus to the economy.

Comprehensive tax lobbying activities can be provided. Proposed Congressional sponsors of proposed legislation will be identified. Tax legislative proposals will be explained and justified at the office of members of the Committee on Ways and Means and the Senate Finance Committee. Briefings will be made on the status and progress of any legislative project. Hearings will be attended and testimony drafted for hearings. Fundraising activities can be organized in addition to "grass roots" lobbying.

In addition to legislative issues before the U.S. Congress, representation, lobbying and information services are provided for all agencies of the U.S. government in Washington, DC. Services provided run the gamut from tax and trade issues to foreign country representation and foreign assistance.

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