Taxpayer defense institute

The Broken IRS
This session addresses the current condition of the IRS in light of COVID-19 shut downs and force reduction. Focus will be on work-arounds when dealing with the Collection and Appeals functions.

Holistic Tax Resolution Strategy
This session presents a broad, holistic “systems engineering” approach to tax resolution. Using checklists and flowcharts, we analyze all the essential “issue spotting” considerations to review when a new client comes in.

Emergency Measures to Stop Collection
This session identifies and explains the three emergency measures to stop enforced collection. This session includes an analysis of the statutory levy exemptions and how to assert them. This session also includes a discussion of claiming a refund for wrongfully levied property. 

Understanding the Tax Court
This session reviews the fundamentals of the U.S. Tax Court. Special emphasis is on Tax Court jurisdiction so practitioners fully understand the scope of cases subject to review by the U.S. Tax Court. This session is essential even for non-attorneys, since non-attorney practitioners regularly encounter situations in which Tax Court is a resolution option that must be recognized. In that case, non-attorneys must be prepared to bring in counsel admitted to practice in the Tax Court.

Appealing a Notice of Deficiency
This session addresses the specific procedures for challenging a Notice of Deficiency, which is the IRS’s final administrative determination that a citizen owes additional taxes. The session addresses the two specific options for judicial review of the Notice of Deficiency and builds on issues presented in the session Understanding the Tax Court.

Appealing a Notice of Determination
This session addresses the statutory procedures for challenging a Notice of Determination, which is the final determination that is issued by the IRS’s Office of Appeals in a Collection Due Process Appeal. It outlines the procedures for judicial review of a Notice of Determination and this session builds on issues presented in the sessions Understanding the Tax Court and Appealing a Notice of Deficiency.

Live Role-playing of Appeal Scenarios
During this session the attendees are broken into separate groups and each group is presented with a set of facts regarding a hypothetical case involving the topics presented. All the facts are derived from actual cases. The groups must develop/present arguments to defend the taxpayer and assert a potential defense based on the facts and applicable law of the case based on all the teachings of the previous day’s sessions. Each group includes an experienced tax pro playing the part of an IRS officer.

Evaluation and Critique of Role-playing Sessions
Dan Pilla and other TFI staff review, critique and analyze each of the mock negotiation sessions. We analyze the strengths and weaknesses of each presentation, evaluate the performance of the participants, and discuss potential alternative approaches under the circumstances.

Tax Court Practice Basics
This session presents the basics of Tax Court practice and procedure, including motions practice, discovery procedures, summary judgment and remand, stipulations and agreed settlement procedures.

Understanding and Avoiding Conflicts of Interest
This session addresses essential considerations for avoiding conflicts of interest. Special emphasis will be placed on potential and actual husband/wife conflicts and conflicts arising from corporation tax issues, including especially the Trust Fund Recovery Penalty. Here we also address the Tax Court Rules of Practice regarding the process of avoiding conflicts of interest.

Ascertaining “Reasonable Fees”
This session addresses the ethical considerations encompassed in the professional responsibility to charge fees for services that are “reasonable.” Specifically, we address IRS Circular 230 governing the practice before the IRS of attorneys, CPAs and Enrolled Agents as it relates to the charging fees.

Moderated Discussion
Group discussion of problems, questions and strategies based upon all earlier presentations. We present and discuss hypothetical cases involving various aspects of IRS problems resolution.

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Small businesses make up the fastest going segment of federal income tax return filers. The number grows by millions every year as more people look for ways to supplement their incomes and gain financial independence. The problem is most people who set out in business have no idea how to meet the dozens of compliance burdens the tax code heaps on business owners. The GAO once counted more than 200 distinct obligations placed on the shoulders of businesses. Can you name all 200? Can you name even 20? Most people can’t. That’s why so many end up in trouble with the IRS. What starts as a dream to gain financial independence often ends as a nightmare when the IRS imposes tens of thousands in unexpected taxes and penalties.

To address this, the 2019 Taxpayers Defense Conference  focused on business tax liabilities.

The Taxpayer First Act
Dan Pilla addresses the Taxpayer First Act, enacted July 1, 2019. In particular, we analyze the legislative changes to the IRS’s Office of Appeals and procedures related to identity theft cases. These procedures are reviewed from the standpoint of both the IRS and the ID theft victim.

The Trust Fund Recovery Penalty
Dan Pilla analyzes new code §6672, which creates personal liability for corporate officers and employees responsible for not paying employment taxes. We analyze the legal basis for liability, the circumstances under which a person may be found liable, defenses to the penalty, how to present defenses, and appeal procedures specific to the penalty.

Employment Tax Compliance Generally
Dan Pilla explains the general requirements employers must meet to be in compliance with employment tax law, including Form 941 compliance, periodic deposit requirements, reasonable compensation rules for employees performing services for a corporation, and rules related to Forms W-2 and W-9.

The Voluntary Classification Settlement Program
Scott MacPherson addresses the IRS’s program that allows employers to seek a determination on the status of workers they designated as independent contractors. Employers entering the program can obtain a definitive ruling on the employment tax status of their workers and thus avoid retroactive penalties for misclassifying workers.

Alter Ego/Nominee Rules
Dan Pilla addresses the legal doctrines of alter ego/nominee in the context of employment tax penalties and the Trust Fund Recovery Penalty. Emphasis is placed on the circumstances under which the IRS will pursue collection of an employment tax assessment owed by one corporation against a successor corporation.

Live Role-playing of Employment Tax Scenarios
The attendees are broken into eight separate groups and each group is presented with a set of facts regarding a hypothetical case involving the topics presented. All the facts are derived from actual cases. The groups must present arguments to defend the taxpayer and assert a potential defense based on the facts and applicable law of the case based on all the teachings of the previous day’s sessions. Each group features an experienced tax pro playing the part of an IRS officer. (Group discussion not recorded)

Session 7: Role-playing Sessions
Pilla, MacPherson and other TFI staff review, critique and analyze each of the mock negotiation sessions. We analyze the strengths and weaknesses of each presentation, evaluate the performance of each participant, and discuss potential alternative approaches under the circumstances.

Avoiding “Aiding and Assisting” Preparer Penalties
Nathan MacPherson will address both civil and criminal penalties against tax professionals for aiding and assisting a taxpayer in the acts of a) submitting a false claim to the IRS regarding a material matters, and b) evading taxes. Special attention is given to the question of what constitutes “aiding” when it comes to tax evasion. This is particularly relevant to our audience since all attendees are actively involved in representing clients before the IRS who owe substantial unpaid tax debts. We will analyze the various elements of “evasion,” what the IRS must prove to establish an “aiding” case, and how to avoid potentially questionable conduct when it comes to advising clients with tax delinquencies.

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IRS’s Future State
Dan Pilla addresses the current enforcement initiatives announced by the IRS, with particular focus on crypto-currency enforcement. Pilla also analyzes the IRS’s new five-year strategic plan that outlines the agency’s long-term goals regarding enforcement and administration.

Section 199A of the Tax Cuts and Jobs Act
Dan Pilla analyzes new code §199A, created under the Tax Cuts and Jobs Act. This is the section that creates the 20% deduction for small businesses and self-employed persons. It is a complex calculation and the deduction is dependent upon a number of fact considerations. Pilla provides numerous examples to illustrate the calculations and reviews the new proposed regulations issued by the IRS on this matter.

Revocation of Passports
Dan Pilla explains the law allowing the IRS to certify certain taxpayers to the State Department as “seriously delinquent” if they owe more than $50,000. He examines what constitutes being “seriously delinquent,” the required “notice” process, what the exceptions are, and how the available appeal procedures work.

The Innocent Spouse Rules
Dan Pilla provides a full analysis of the provisions of code §6015(b) and (c), the innocent spouse and separate spouse election rules, along with IRS Form 8379. Special emphasis is put on the burden of proof a taxpayer must carry to establish entitlement to innocent spouse relief.

Innocent Spouse Equitable Relief
Scott MacPherson addresses code §6015(f), the so-called “equitable relief” provision under the innocent spouse rules. Separate rules apply under §6015(f) if a taxpayer does not qualify for relief under either §6015(b) or (c). This is an important provision because there is no statute of limitations on a taxpayer’s right to apply for relief under this provision, contrary to both §6015(b) and (c)

Live Role-playing of Innocent Spouse Scenarios
The attendees broke into eight separate groups and each group is presented with a set of facts regarding a hypothetical innocent spouse case. All the facts are derived from actual cases. The groups must present arguments to defend the taxpayer and assert a potential innocent spouse defense based on the facts and applicable law of the case based on all the teachings of the previous day’s sessions. Each group will feature an experienced tax pro playing the part of an IRS officer. (Breakouts not recorded.)

Evaluation and Critique of Role-playing Sessions
Dan Pilla, Scott MacPherson and other TFI staff review, critique and analyze each of the mock negotiation sessions. They analyze the strengths and weaknesses of each presentation, evaluate the performance of each participant, and discuss potential alternative approaches under the circumstances.

Ethical Considerations for Entertainment Expenses
The Tax Cuts and Jobs Act changed considerably the rules for deducting business entertainment expenses for years beginning in 2018. The narrow definition of “entertainment” expenses in §274 and its regulations raise serious ethical considerations for tax pros in the preparation of business tax returns. Pros must be aware of the applicable definitions, they must caution their clients regarding what is an “entertainment” expense (and thus non-deductible) and what is an otherwise allowable business expense (and thus fully deductible). Dan Pilla analyzes the various elements of §274, include the infamous §274(d), which carries very strict record-keeping rules for deducting business meals, travel and entertainment expenses. Tax pros must know these rules and must ensure that their clients know these rules order to, a) avoid claiming expenses that are not deductible, and b) taking the benefit of deductions that are otherwise perfectly legal.

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IRS Attacks on Small Business
This session addresses the current audit initiatives announced by the IRS, with particular focus on small businesses. Dan outlines the specific types of businesses targeted and the areas of audit the IRS is expected to focus on.

Understanding Real Estate Professional Rules
This session explains and analyzes of the rules governing real estate professionals under code §469; what constitutes a real estate professional, and the requirements for “material participation” under the statute. We also look at consequences of not meeting the rules for material participation.

Reasonable Compensation for Corporate Officers
This session explains the law regarding corporate statutory employees, the applicable employment tax rules when corporate officers and shareholders provide substantial services to their corporations, and the law regarding reasonable compensation for both regular corporation executives and sub chapter S corporation executives.

Hobby Loss and Home Office Rules
This Session provides a full analysis of the provisions of code §183, regarding the necessity of a profit motive to allow business expense deductions, and code §280A, regarding the business use of a home. We address the statutory standards for the deductions and the peculiar record keeping requirements to prove entitlement to the deductions.

Employees vs. Independent Contractors
This session addresses the IRS’s “20 common law standards” for determining whether a worker is an employee or an independent contractor. We address the burden of proof necessary to establish contractor status, and analyzes the relief available under §§530 and 3509 when workers are erroneously misclassified.

Live Roll-playing of Audit and Appeal Scenarios
The attendees are broken into eight separate groups and each group is presented with a set of facts regarding a hypothetical business audit case. All the facts are derived from actual cases. The groups must present argument to defend the taxpayer and negotiate a settlement based on the facts and applicable law of the case based on all the teachings of the previous day’s sessions. Each group will feature an experienced tax pro playing the part of an IRS officer.  (Note: Roll playing is not recorded.)

Evaluation and Critique of Role-playing Sessions
Dan Pilla and a panel will review, critique and analyze each of the mock negotiation sessions. We analyze the strengths and weaknesses of each presentation, evaluate the performance of each participant, and discuss potential alternative approaches under the circumstances.

Avoiding Conflicts of Interest
This session discusses the many conflict of interest considerations in audit situations, particularly where joint tax returns involve the business of just one taxpayer, and where corporate audits implicate the officers and shareholders of the corporation itself. We address the requirements in IRS Circular 230 to inform taxpayers of actual or potential conflicts of interest, and the requirement of written acknowledgements and waivers by clients in the case of potential conflicts.

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The IRS in Crisis
Dan Pilla addresses the current problems with IRS administrative issues due to budget and staffing cuts. We discuss computer security problems, correspondence processing, and appeals case backlog. We address ways to navigate around these obstacles.

Understanding IRS Transcripts
Explanation and analysis of the various computer transcripts and codes the IRS uses in the processing of all cases. Understanding these transcripts is an essential element of determining the posture of a given case and the procedures necessary to work to a resolution.

How to Stabilize Collection
Dan Pilla explains exactly how the IRS begins enforced collection action in a given delinquency case, and exactly how to keep a case from progressing from the initial notice stage to the levy stage. Dan will explain the IRS’s Automated Collection Service procedures and how to deal with a revenue officer assigned to collect a tax. Focus will be on IRS code sections 6159 and 6343, regarding installment agreements and the prevention of levy and seizure actions.

How to Establish an Installment Payment
Dan Pilla provides a full analysis of the IRS’s installment agreement rules, including analysis of relevant code sections and the Internal Revenue Manual. There will be heavy emphasis on determining what constitutes allowable living expenses for the purposes of determining the installment agreement amount.

The Partial Pay Installment Agreement
Steve Klitzner, Attorney, analyzes the tax code and provisions of the Internal Revenue Manual that allow the IRS to enter into a two-year installment agreement that only partially pays the tax, which is the so-called Partial Pay Installment Agreement. We discuss the requirements that must be met for inclusion in the program, the forms and procedures needed to get a client approved, and the IRS’s requirement for ongoing financial analysis once the client is included in the program.

Live Roll-playing of Installment Agreement Negotiations  (not recorded)
The attendees will be broken into eight separate groups and each group will be presented with a set of facts regarding a hypothetical delinquent taxpayer. All the facts are derived from actual cases. The group will determine the best course of action for attempting to negotiate a collection hold and establish an installment agreement, based on all the teachings of the previous day’s sessions. Each group will feature an experienced tax pro playing the part of an IRS officer.

Evaluation and Critique of Role-playing Sessions
Dan Pilla, Donald MacPherson, Attorney, and Paul Tom, Attorney will review, critique and analyze each of the mock negotiation sessions. They analyze the strengths and weaknesses of each presentation, evaluate the performance of each participant and discuss potential alternative approaches under the circumstances. They also address ethical issues, including potential conflicts of interest, given the facts of the case.

Ethical Considerations in Installment Agreement Appeals
Dan Pilla discusses the many ethical considerations in play when contemplating an installment agreement appeal. Most importantly of all the factors, an installment agreement appeal tolls the IRS’s collection statute of limitations, effectively giving the IRS more time to collect. We analyze the statutory tolling provisions (there are five them) which most tax pros are simply unaware of. IRS rules are specific and detailed on ethical issues in such cases, including income and asset disclosures, tax compliance with current and future filing and payment responsibilities, and counsel’s responsibility to provide accurate information. We also address the potential penalty under code section 6702 that applies to any “frivolous submission” to the IRS, which by law includes an Installment Agreement.

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The Offer in Compromise
The Offer in Compromise (OIC) is the IRS’s flagship settlement program. We discuss the four types of offers, the fact scenarios behind each one, the two different administrative procedure tracks for OICs, and we examine the forms and worksheets necessary to present and argue an OIC. We discuss the important strategy of using the Collection Due Process channel as the single best means to present an OIC. This strategy will give you the most leverage in getting your OIC accepted.

Figuring Reasonable Collection Potential
We discuss and explain of the essential element of the OIC, which is the taxpayer’s “reasonable collection potential.” We discuss the IRS’s extensive Internal Revenue Manual (IRM) provisions on this subject, including an analysis of the IRS’s fixed standards for living expenses. Most importantly, we explain how to defeat the arbitrary application of the IRS’s housing and transportation standards, something that bites taxpayers in nearly every OIC.

How to Handle an OIC Hearing and Live Role-playing
Dan Pilla explains exactly how an OIC hearing is conducted from both the perspective of the IRS and the taxpayer. He will address how to set up and present a case and how to present facts and evidence to an OIC examiner. This session includes live, mock OIC hearings in which the participants will function as counsel representing a taxpayer’s case before an OIC examiner. Experienced TFI members will assist with the mock hearings, functioning as OIC examiners. The hearings will be based upon several sets of hypothetical facts common to tax delinquency cases. (Breakouts are not recorded)

Evaluation and Critique of OIC Hearings
Dan and the OIC examiners will review, critique and analyze each of the mock hearings. They analyze the strengths and weaknesses of each presentation, evaluate the performance of each participant and discuss potential alternative approaches under the circumstances. This is a highly educational process, as all participants will provide insight into their experience in the hearing.

Effective Tax Administration and Special Circumstances
Dan addresses the IRS’s so-called “Effective Tax Administration and “Special Circumstances” OICs. These are offer opportunities made available by IRS regulations that allow a person to present an offer in circumstances where he might not otherwise qualify. We examine the IRS’s regulations and the IRM provisions that govern this procedure. Knowledge of procedures is essential as it will give you opportunities to resolve even the most difficult cases.

Dealing with Dissipated Assets
Dan addresses the special rules that apply to citizens with fixed assets when entering into an OIC. Examples include liquid cash, retirement accounts, cash value of insurance policies, etc. IRS administrative procedures and Tax Court case law is specific on how such assets are to be considered and valued in an OIC, and these authorities address the consequences of a taxpayer liquidating such assets for less than fair market value prior to submitting an OIC.

“Not in the Government’s Best Interest”
Dan discusses the many ethical considerations of an OIC. IRS rules are specific and detailed on ethical issues, including income and asset disclosures, tax compliance with current and future filing and payment responsibilities, and counsel’s responsibility to provide accurate information. We address the detailed IRM provisions that allow the IRS to reject an OIC that might otherwise qualify for acceptance if acceptance is “not in the government’s best interest.” We also address the potential penalty under code section 6702 that applies to any “frivolous submission” to the IRS, which includes an Offer in Compromise.

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The IRS Strategic Plan
Dan will review and explain the IRS’s 2014-2017 strategic plan. This plan lays out the IRS’s strategies regarding audits, collection and tax law enforcement in general. We discuss the IRS’s policy and strategy changes that will affect how the IRS enforces the law in the foreseeable future.

The Collection Due Process Appeal–Generally
The right to a Collection Due Process (CDP) appeal is among the most important and powerful rights enjoyed by taxpayers. The more you understand about these rights, the more leverage you have to prevent harmful collection action (such as levies and seizures) and the better chance you’ll have of negotiating a reasonable settlement. Dan explains the CDP lien and levy appeal rights under code sections 6320 and 6330. We address the timely filing of CDP appeals, issues that can and cannot be addressed in CDP appeals, and the burden of proof in CDP cases.

How to Handle a CDP Hearing and Live Role-playing
Dan explains exactly how a CDP hearing is conducted from both the perspective of the IRS and the taxpayer. He will address how to set up and present a case and how to obtain discovery from the IRS prior to the CDP hearing. This session will include live, mock CDP hearings in which the participants will function as counsel representing a taxpayer before an IRS hearing officer. Certain participants will play the roles of IRS settlement officers. The hearings will be based upon several sets of hypothetical facts common to tax delinquency cases. (Not recorded)

Evaluation and Critique of CDP Hearings
Dan and those performing as settlement officers will review, critique and analyze each of the mock hearings. We will analyze the strengths and weaknesses of each presentation, evaluate the performance of each participant and discuss potential alternative approaches under the circumstances. We will also address ethical issues, including potential conflicts of interest, given the facts of the case. This session will be a tremendous opportunity to prepare for and participate in a CDP hearing under the tutelage of highly skilled and experienced tax pros.

Proving Abuse of Discretion in CDP Appeals
In this session, Dan addresses recent case law issued by the United States Tax Court on the question of the taxpayer’s burden of proof in CDP appeals. We evaluate both winning and losing cases and discuss the body of evidence needed to prevail in the case.

The CDP Judicial Appeal
Adverse CDP decisions are appealable to the United States Tax Court. This is a key reason why a properly prepared tax pro has great leverage in CDP cases. In this session, Dan addresses the specific procedures for a judicial appeal of an adverse CDP decision. He explains the Tax Court’s jurisdiction and lays out the essential elements of a Tax Court Petition for review of a CDP determination. He also explains the manner in which CDP cases are resolved by the Tax Court, including remands, summary judgment and court trials.

CDP Employment Tax Appeals
Here Dan discusses the special rules that apply to CDP appeals involving delinquent employment taxes, including the collection stay provisions of code section 6330, the Trust Fund Recovery Penalty and other related issues.

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