Tax Litigation and Controversy
Whether you are negotiating a new contract or in the middle of a court case, tax consequences generally are not your primary focus. However, the manner in which you and the other parties decide to classify certain settlements or agreements can have a big impact on the after-tax cash you receive. Certain types of payments might not be taxable at all – like payments for physical injuries – and other payments might be subject to not only income tax, but also Social Security and Medicare taxes. The allocation of the sales price of a business could impact your income tax rate, as well as how much sales tax or property tax you pay.
We are tax professionals, so if you already have an attorney on your side, we can work with both you and your lawyer to negotiate the best after-tax resolution. If our attorneys are handling your matter, then great tax advice is here from beginning to end. We have helped countless business owners buy or sell their businesses – finding ways to maximize depreciation or utilize the capital gains rate, which can be almost 15-20% lower than the ordinary income tax rate. Terminated employees have sought our advice on how to classify settlements with their former employers in order to minimize employment taxes and deduct their attorney’s fees. We also work with estates and beneficiaries in disputes over assets.
Nearly every time money changes hands, particularly within litigation, there are tax consequences. Because we include an experienced tax department within a law firm, we are uniquely positioned to best serve your tax litigation needs.
When you come home to find a letter from the IRS or an inquiry from a state or local tax authority, it can be stressful. We respond to dozens of these letters every year and we can resolve some issues with simply a letter or phone call. Unfortunately, other letters can lead to an involved audit, significant tax assessments, or even criminal charges. Our firm prepares taxes, so we have a first-hand understanding of the tax law and the corresponding forms. We will work with you and your tax preparer to gather the appropriate documents and defend you from the government’s agents.