Experience — Our practice consists of representing clients in tax disputes and tax collections. Our staff of attorneys and certified public accountants (CPAs) has over 100 years of combined experience dealing with resolving clients’ tax problems. Unlike most corporate tax law and accounting firms that usually deal only with whether the tax liability is due and owing, we handle all aspects of our clients’ tax issues from initial evaluations of a proposed audit adjustment or assessment to comprehensive analysis of collection potential and alternatives. By targeting the issues that are most important to the overall outcome, we strive to use a client’s resources efficiently and do not waste time and effort fighting a liability that likely will never be reduced, but rather concentrate on dealing with the tax liability as a collection problem.
When it comes to representing clients in the tax collection arena, we are unaware of any firm in the state with more experience than ours. Because we concentrate on tax dispute resolution, we understand the available options for negotiating and pursuing resolutions most favorable to our clients.
Unlike national “consulting” firms that use aggressive advertising to promote “Pennies on the Dollar” Offers in Compromise, we understand the complicated rules for discharging taxes in bankruptcy, know when bankruptcy is a better option than an Offer in Compromise and know when the mere threat of bankruptcy can significantly lower the amount of an Offer in Compromise. While the national firms profess to be federal Offer in Compromise specialists, they know little or nothing about state Offers in Compromise and how they should be handled in conjunction with pending federal Offers in Compromise. It does not benefit a taxpayer to compromise a large amount of federal taxes when the lower, but still significant, amount of state taxes is left unresolved.
Wingfield & Corry, P.A., knows virtually every state and federal tax collector in Arkansas. We know how each one approaches his or her job, what has worked in the past as a solution with individual collectors, their many nuances and idiosyncrasies and how to best deal with each.
Very few traditional CPAs have enough experience in tax collection to do it efficiently. Furthermore, most, if not all, CPA firms that operate in this arena are not knowledgeable about bankruptcy, which can be handled only by a lawyer. In addition, although CPAs can handle Tax Court litigation when it is necessary, it is beyond their natural element. They are taught to account and plan, which is an essential part of and helpful to the tax resolution process. However, the process also includes negotiation, argument and legal proceedings. Our firm consists of three attorneys (one of whom has a Masters in Estate and Tax Planning) and three CPAs, and we have found that CPAs make excellent tax resolution specialists when properly trained and supervised by an attorney when properly trained and supervised by an attorney. Wingfield & Corry, P.A., is a law firm, not a CPA firm and is not licensed by the Arkansas State Board of Public Accountancy. However, the CPAs that work for Wingfield & Corry, P.A., are.
Since approximately 1988, the Criminal Investigation Division of the Internal Revenue Service (“IRS”) has been beefed up to handle the resulting aftermath of the poor job done by the IRS with regard to compliance and collection.
Statute 26 USC §7201 states it is a felony to purposefully attempt to evade or defeat any federal tax with the punishment for doing so prison and/or fines. This statute includes two separate crimes – attempting to evade or defeat by failing to file and/or by failing to pay. It also is a felony to fail to account and pay over employment withholdings (26 USC §7202) and/or to willfully file a fraudulent tax return (26 USC §7206). Federal law states that willfully failing to file and pay income taxes or estimated taxes is a misdemeanor (26 USC §7203). Currently, the IRS is devoting significant time pursuing employers who fail to pay employment taxes while living lavishly or otherwise taking actions to avoid payment.
Likewise, Arkansas law makes it a Class C felony to willfully attempt to evade or defeat any state tax (Ark. Code Ann. §26-18-201).
Therefore the short answer is yes, the failure to file and the failure to pay income taxes while taking evasive action to avoid doing so can involve criminal prosecution and jail time. While the vast majority of tax cases are not criminal matters, it is important to recognize a case that may become a criminal matter and persuade the IRS not to pursue those investigated by its Criminal Investigative Division.