James, McElroy & Diehl attorneys are experienced in providing representation to individuals and business entities in Federal tax audits, as well as in audits conducted by North Carolina and South Carolina taxing authorities.
In civil audit contexts, we understand the tax examination process and the different dynamics that characterize a serious, aggressive audit versus a less threatening audit that is focused on a possible mistake or small noncompliance. We generally know when cooperation with the taxing authorities will benefit the client and when it is necessary to resist demands or disagree with adverse characterizations of tax issues. Usually, with regard to a state or IRS audit, the Firm will stay in the background until the latter stages, guiding the client, frequently working with the client’s CPA. The Firm has extensive experience negotiating the outcomes of tax examinations.
The Firm has dealt with examinations (audits) and disputes regarding payroll taxes, sales and use taxes, independent contractor versus employee issues, domicile disputes, charitable contributions, exempt status and other areas that generate tax controversies. The Firm also was recently heavily involved in a highly publicized nationwide dispute between the Internal Revenue Service and a “Big 4” accounting firm relating to alleged fraudulent tax strategies recommended by the accounting firm, and we obtained a favorable resolution for our client, a partner in the accounting firm, who was incorrectly alleged to have been a person at the center of the alleged fraudulent tax strategy scheme.
When tax is owed and unpaid, we work with clients in dealing with IRS or state tax collection efforts to hopefully minimize disruption of the client’s lifestyle or business and workout payment plans or offers and compromise.
We are experienced in representing clients in both State and Federal criminal tax investigations as well as in the defense of criminal tax charges in both arenas.
We have successfully persuaded both the IRS and State Department of Revenue to resolve controversies without prosecutions and are proactive in representing clients during the investigatory stages.