Resolving Matters With The IRS Doesn't Have To Be Painful
Contact Me To Discuss Your Options
As an experienced Chicago Taxation Attorney with more than 30 years experience, my goal is to assist clients in resolving matters with the Internal Revenue Service as painlessly, expeditiously and economically as possible, with a minimum of disruption to their daily lives.
I represent individual and corporate clients, large or small, in all aspects of and at all levels of federal and state taxation. This includes everything from non-filing and questions concerning the presentation of information on tax returns, to handling audits, appeals and trials before the United States Tax Court and the Courts of Appeals, as well as refund litigation in the District Courts and the Claims Court. As a trusted Chicago Taxation Attorney, I am adept at resolving a broad range of tax issues, including:
- Negotiating Favorable Settlements
- Offers in Compromise
- Collection Due Process Appeals
- Innocent Spouse cases
- Employment Tax cases
- Penalty Abatement
- Audit and Assessment issues
If the tax already has been assessed, I handle Collection Division problems including working out monthly installment agreements and Offers in Compromise. I have been quite successful in having wage levies released promptly and federal tax liens released or subordinated, depending on the circumstances.
I also handle employment tax problems, including trust fund recovery penalties and questions of independent contractor vs. employee.
My office is on LaSalle Street, a few blocks from the IRS District, Appeals and Counsel Offices, as well as from the building where the United States Tax Court holds its sessions in Chicago. Although based in Chicago, I service clients anywhere in the State of Illinois and the northwest portion of Indiana. Due to the nature of IRS practice, I also have successfully served clients as far away as Florida, the East Coast and the West Coast. I have successfully handled IRS audits, appeals and trials in the United States Tax Court.
As a client, you can also be assured that you will be copied on all correspondence and kept apprised as your case's progress. I will fully explain and review with you all actions taken or to be taken, making certain that you understand and agree with the proposed action.
Call me, Alan F. Segal, today at 312-265-3745, or complete the contact form provided on this site to schedule your initial consultation.
Alan F. Segal
Alan Segal is an experienced attorney who has been practicing tax law in the Chicago metropolitan area since 1970. He is a graduate of Georgetown University and the University of Chicago Law School. A member and past Chairman of the Chicago Bar Association Practice and Procedure Section of the Federal Tax Committee, he has authored chapters on taxation in Illinois Institute for Continuing Legal Education handbooks, has lectured frequently at continuing legal education seminars and has written articles for several publications concerning various aspects of taxation.
Ryan M. Borgmann, Associate
Ryan M. Borgmann has been practicing law for more than five years. After receiving his degree in Management from Purdue University, Ryan went on to Valparaiso School of Law where in 2005, he received his J.D. In 2010, Ryan graduated from DePaul University with an LL.M. in Taxation. During that time, he worked as an Intern for the Office of Chief Counsel of the Internal Revenue Service, as well as several Associate positions throughout the greater Chicago land area.
Frequently Asked Questions
My return is prepared, but I owe the Internal Revenue Service money and can't afford to pay. Should I file?
Even if you can't pay your Federal income tax, you still should file your return. You can request extensions, which give you until August 15, and again, until October 15 to file. The penalty for not filing your return is five percent (5%) per month on the balance due, up to twenty-five percent (25%). Depending on the circumstances, you also could be criminally charged for "failure to file." Paying what you can reduces the amount on which you have to pay penalties. The failure to pay penalty is one-half (1/2) of one percent (1%) per month. A tax professional can help you work out a monthly payment arrangement with the Internal Revenue Service, although interest and penalties continue to accrue on the unpaid balance until it is paid in full.
Can I eliminate my personal taxes through bankruptcy?
As long as the returns did not involve "fraud," Federal and state income taxes can be discharged in a Chapter 7 bankruptcy, provided the returns were filed and the taxes assessed more than three years before the bankruptcy petition is filed. An additional requirement is that the Bankruptcy Court (or Internal Revenue Service) determines that the taxpayer did not willfully attempt to evade or defeat the taxes in question. There are additional rules for discharging taxes assessed subsequent to filing, as a result of an audit. Taxes due based on returns prepared by the Internal Revenue Service as "substitutes for returns," cannot be discharged. Employment or payroll taxes, including the trust fund recovery penalty, cannot be discharged. You should consult with an attorney whose practice is concentrated in bankruptcy, as well as with a tax professional, if necessary.
What is an Offer in Compromise?
An Offer in Compromise is an agreement between the taxpayer and the Internal Revenue Service that resolves the taxpayer's liability for less than full payment. The most frequent basis for acceptance of an Offer is that doubt exists that the taxpayer could ever pay the full amount owed. This determination is based on a Collection Information Statement (Form 433-A), showing the taxpayer's current financial situation, including the value of assets and current income and expenses for purposes of projecting future income over a specified period, which depends on the statute of limitations. Before filing an Offer (Form 656), the taxpayer must have filed all required returns. Returns also must be filed timely, on a fully paid basis, while the Internal Revenue Service considers the Offer and for five (5) years after the Offer is accepted. If a bankruptcy proceeding is pending, the Offer cannot be considered by the Internal Revenue Service until the bankruptcy is terminated. To find out if you qualify, you should consult with a tax professional.
What is a trust fund recovery penalty?
When employment or payroll taxes are not paid by the business, the Internal Revenue Service can assess liability against the "responsible officers" of the business for the unpaid trust fund portion of the tax, i.e., the amounts withheld from employees for income tax, social security and Medicare. The penalty cannot be discharged in bankruptcy. If the Internal Revenue Service proposes a trust fund recovery penalty (or the Illinois Department of Revenue issues a Notice of Penalty Liability for sales tax or withheld state income taxes), you should consult a tax professional, as there are ways to minimize or avoid the liability.
I was divorced last year and now the Internal Revenue Service is after me for taxes owed on returns I previously filed with my ex-husband. How do I qualify for "innocent spouse" relief?
If you filed a joint return with your ex-spouse, there is an understatement of tax on the return(s) due to erroneous items (items omitted from or incorrectly reported on the joint return), you can show that when you signed the return(s) you did not know or had no reason to know that the understatement of tax existed (or the extent to which the understatement existed) and taking into account all the facts and circumstances, it would be unfair to hold you liable for the understatement of tax, you may be allowed innocent spouse relief. We recommend that you consult with a tax professional before you file Form 8857, Request for Innocent Spouse Relief.
One of my earliest Tax Court victories was a landmark decision, the first under the "timely mailing, timely filing statute." In this case, I convinced the Court that the Internal Revenue Service had mailed its Notice of Deficiency two days too late, thereby voiding an assessment of several hundred thousand dollars. I have successfully had clients determined to be "innocent spouses," thereby relieving them of large debts incurred on previously filed joint income tax returns.
I also have had considerable success in having trust fund recovery penalties significantly reduced or abated in full. In one such case, the IRS abated a liability of more than $250,000 and released a previously filed lien. In other cases, implementation of my recommendation that the incorporated business be closed saved clients thousands of dollars in interest, deposit, late filing and late payment penalties.
I also have secured Offers in Compromise for my clients, compromising liabilities for far less than the amount owed. Where the client is not a candidate for an Offer, I have had wage levies released and monthly payment arrangements set up.
In addition, I have been successful in having federal tax liens released due to the expiration of the statute of limitations on collection, subordinated to mortgages of new lenders to allow refinancing and/or discharged to enable the sale of real estate to be completed, notwithstanding the fact that the IRS was not paid in full and the client still owed a large IRS balance. In a case where the IRS filed suit in the District Court to reduce their $1.2 million claim to judgment, I convinced the Service to settle for $50,000 due to the statute of limitations.
In other cases where the IRS had been demanding payment of large alleged debts, I successfully obtained refunds from the IRS of more than $100,000. Just because the IRS says you owe them monies does NOT make it so.