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NYC Tax Attorney Cases

A NYC tax attorney typically handles a wide variety of cases. From tax fraud to innocent spouse relief, the nature of a tax attorney’s caseload can be extremely diverse. Significantly, and given the fact that New York City has its own personal income tax, NYC tax attorneys must also be prepared to deal with a city income tax, unlike in most other cities.

Looking past the specific NYC tax issues, though, NYC tax attorneys do tend to come into contact with certain types of cases more often than others. Many NYC tax attorneys, in fact, tend to build their practices around a core group of commonly used services. An attorney will usually focus on these core services and develop a specialized practice. Some tax attorneys will literally focus just on one or two specific types of cases and ignore other areas entirely. As the U.S. (and New York) tax codes becomes ever more complex, and as more and more attorneys enter the market, this is inevitable. Greater complexity necessarily leads to greater practice focus, particularly as attorneys need to devote more time to mastering this complexity and maximizing their competitiveness. 

In this post, we will go over a few types of cases which are among the most common cases handled by NYC tax attorneys. Of course, not every tax attorney will handle these types of cases. And a fair number may not handle these types at all. But, if taken on a purely statistical basis, these types of cases do tend to come up with relatively high frequency. Let’s explore the details of a few of the more commonly handled cases.

Type #1: Offers-in-Compromise 

The first type of case commonly handled by NYC tax attorneys we can look at is the offer-in-compromise, or OIC. We’ve devoted several pieces on our blog to different aspects of OICs. An OIC is literally an offer to the IRS to settle a tax debt for less than its full face value. OICs can be a great tool which allow taxpayers to create a clean slate and rebuild their financial condition. One of the most attractive things about OICs is that they offer tax relief. Though taxpayers will have to pay a lump sum, a successful OIC will ultimately eliminate a portion of a taxpayer’s tax debt. 

NYC tax attorneys assist taxpayers with OICs by offering them their unique perspective on the subject. OICs are reviewed according to very specific criteria. For instance, when reviewing an OIC, the IRS will consider a taxpayer’s “reasonable collection potential,” or RCP. The IRS generally only accepts offers which are consistent with a given taxpayer’s RCP.

Computing a taxpayer’s RCP is a very involved, complex, procedure. But the main ingredients of someone’s RCP are current assets, current liabilities, total tax debt and future income. The IRS also only accepts OICs when certain conditions are present. A successful OIC depends not just on an offer which is closely aligned with RCP. Rather, there are other relevant factors which have to be present. Again, having a knowledgeable NYC tax attorney is extremely helpful. Otherwise a great deal of time, energy and money could be lost. Taxpayers need an attorney to help them navigate the complexities of a RCP and submit an offer which has a reasonable chance of acceptance.

Type #2: IRS Installment Agreements 

Another case which is commonly handled by NYC tax attorneys is the installment agreement. Taxpayers with significant back tax debt have the option of entering into an agreement to repay that debt over time. Unlike an OIC, an installment agreement doesn’t allow a taxpayer to pay less than the full face value of the debt. But, the installment agreement does make the burden of repayment much more manageable. With an installment agreement, taxpayers can spread the repayment over a period of months or even years. 

In these types of scenarios, it is beneficial to have an attorney for many of the same reasons which apply to OICs. Installment agreements are not all the same. Instead, they can vary depending on the size of the debt, the taxpayer’s financial condition and prior repayment history with the IRS. To optimize a taxpayer’s resultant installment payment plan, taxpayers need a qualified tax attorney to help them understand the nuances of the process in order to submit a viable plan. 

Type #3: Risk Analysis Consulting 

Yet another type of case often handled by NYC tax attorneys is transactional risk analysis. Tax law is all about rules, and tax attorneys are people who have spent time mastering different sets of rules. Sometimes, businesses or individuals conduct transactions which can carry certain levels of risk. This risk comes about because there are often uncertainties about the contours of a particular legal requirement.

For instance, NYC tax attorneys may give counsel on a certain type of transaction, such as a Sec. 368 tax-deferred reorganization or a Sec. 1031 tax-deferred exchange. If a person conducts a 1031 exchange, that person takes a risk, because the requirements of 1031 can be contested by the IRS. This means that the IRS may be able to challenge whether appropriate requirements are met. Of course, this all depends on the specifics of the case. This is where tax attorneys are helpful.

Good NYC tax attorneys need to bring their expertise and other persuasive material to bear for the benefit of clients. A good NYC tax attorney can help someone structure their transaction so as to minimize the likelihood of collapse. If a complex tax transaction, such as a Section 368 or Section 1031 like kind exchange does not succeed, this can lead to severe negative financial consequences.

NYC Tax Attorneys For You

And there you have it. If you asked a NYC tax attorney at random, odds are high that he or she would focus his or her practice in at least one of these areas. The firm of Mackay, Caswell & Callahan, P.C., would confirm this assessment. At MC&C, we focus on many tax relief programs, including OICs, installment agreements and other types of tax resolution. We’ve helped many, many, clients get out of trouble with tax debt and rebuild their financial future. If you need counsel on any tax debt related issue, don’t hesitate to reach out. One of our top New York City tax attorneys will be happy to assist you.

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