In South Texas, the unique blend of a thriving economy, a strong entrepreneurial spirit, and complex state and federal regulations can sometimes lead to unexpected tax challenges. Whether you’re a small business owner in Corpus Christi or an individual facing an IRS notice, tax issues can be intimidating. The Texas Comptroller’s office has a different set of rules from the IRS, and navigating both can feel like a full-time job.
At COTTS Law, we understand these specific pressures. Led by Daniel T.A. Cotts, a seasoned Tax Attorneywith extensive experience in the field, we are dedicated to helping our clients find legal solutions to their tax problems. Unlike many tax resolution firms, we don’t offer one-size-fits-all solutions. Instead, we provide personalized legal counsel and robust representation to help you resolve your tax issues and move forward with confidence.
This guide will break down some of the most common tax problems faced by Texans and explain how a tax attorney can be your most valuable asset in the fight for your financial well-being.
Understanding the Key Players: The IRS vs. the Texas Comptroller
When you’re dealing with a tax problem, the first step is to identify which agency is pursuing you. While the IRS handles federal income taxes, the Texas Comptroller of Public Accountsis the primary state tax agency. Because Texas has no state income tax, the Comptroller’s focus is on other crucial areas, including:
- Sales and Use Tax:Collected on the sale of goods and certain services. Audits in this area are common and can be highly complex.
- Franchise Tax:A business tax imposed on corporations and other business entities.
- Property Tax:While assessed by local appraisal districts and collected by counties, the Comptroller’s office has an oversight role and provides resources for taxpayers.
A common mistake is assuming that resolving an IRS issue will also take care of a state tax problem. In reality, you may be dealing with two separate, equally aggressive entities that require different strategies to manage.
When to Bring in a Tax Attorney: Common Scenarios
Attempting to handle a serious tax issue on your own is a high-risk gamble. The rules are complex, the penalties are severe, and a single mistake can cost you thousands, if not millions, of dollars. Here are a few scenarios where engaging a tax attorney is not just a good idea—it’s essential.
1. You’re Facing a Tax Audit
A tax audit, whether from the IRS or the Texas Comptroller, is an extensive examination of your tax returns and financial records. For a business, this can be particularly burdensome, as an auditor may review years of financial data, sales receipts, and business expenses.
- Comptroller Sales Tax Audits:These audits are highly technical. The Comptroller’s office will often use a “sampling” method to estimate your total tax liability, which can result in an unfair and inflated tax assessment. An experienced tax attorney can challenge the validity of this sampling method and negotiate a more accurate assessment.
- IRS Income Tax Audits:The IRS may question deductions, business expenses, or sources of income. Without professional representation, you may unknowingly provide the auditor with too much information or fail to provide a strong legal basis for your claims.
Our firm’s role is to act as a buffer between you and the auditor. We handle all communication, prepare your documentation, and present a clear, defensible case that protects your rights and minimizes your tax liability.
2. You’ve Received a Final Notice of Intent to Levy
Receiving a notice of intent to levy is one of the most urgent tax problems. A levy is a legal seizure of your assets to satisfy a tax debt. This can include your bank accounts, wages, or even your retirement funds. The IRS and the Texas Comptroller’s office are not shy about using this tool, and they will proceed unless you take immediate action.
- Wage Garnishment:A portion of your paycheck is sent directly to the government. This can happen with both federal and state tax debt.
- Bank Levy:The agency can seize funds from your bank account.
The window to respond to these notices is very short. Our team can immediately intervene to negotiate the release of the levy or garnishment, halting the collection process and giving us the time to negotiate a lasting solution, such as a manageable payment plan or a formal settlement.
3. You’re Considering an Offer in Compromise (OIC)
An Offer in Compromise (OIC)is a powerful tool that allows you to settle your tax debt for less than the full amount. This option is available for both IRS and Texas tax debts if you can demonstrate that you cannot pay the full amount owed or that paying would create a significant financial hardship.
This is a complex legal process that requires a thorough understanding of financial analysis and IRS or state regulations. The government will scrutinize every detail of your financial life, including your assets, income, and expenses, to determine your “Reasonable Collection Potential.” A single mistake on the extensive paperwork can lead to a swift rejection.
As your legal counsel, we will meticulously prepare your OIC, providing a compelling argument for why your case should be accepted. We know what documentation is needed and how to present it in a way that maximizes your chances of success.
The Advantage of Working with a Tax Attorney
While many tax resolution firms employ Enrolled Agents or CPAs, only a tax attorneycan provide attorney-client privilege. This is a crucial distinction. It means that everything you discuss with us is confidential and cannot be used against you in a legal proceeding. This protection allows for an open and honest dialogue about your financial situation, which is critical for building the strongest possible defense.
Furthermore, a tax attorney has the legal authority to represent you in federal tax court. In cases where negotiations with the IRS or state agencies break down, your tax attorney can litigate on your behalf, ensuring your rights are protected every step of the way.
Daniel T.A. Cotts brings a unique skill set to the table. As a seasoned attorney, he is well-versed in negotiation, litigation, and the intricate details of tax law. He understands that a tax problem is more than just a financial issue—it’s a legal one. Our firm is dedicated to providing you with the peace of mind that comes from knowing your case is in capable, professional hands.
Whether you’re dealing with an audit, a levy, unfiled returns, or a complex tax debt, the time to act is now. Don’t let tax problems control your future.
Contact COTTS Law today at (361) 866-3819 to schedule a confidential consultation. Let us put our legal expertise to work for you.
