Bennett Guthrie associate Alex Scurtu, who represents taxpayers before federal and state tax authorities, advises that the best possible outcome starts months ahead of time with accurate record keeping – and with being willing to ask for help from an experienced tax attorney at the first sign of trouble.
Two things are said to be certain: death and taxes.
And one thing’s certain about taxes – if you get a written notice regarding an audit or assessment from the Internal Revenue Service or from the North Carolina Department of Revenue, a response sooner rather than later is the best call you can make.
That’s some good – and free – advice, thanks to Alex Scurtu, who recently joined the tax group of Bennett Guthrie, a Winston-Salem law firm that specializes in business and estate law.
“The role of an attorney within an audit or assessment is to pursue resolution on behalf of the taxpayer, and one of the things that comes to mind is that you need to be engaging with IRS at every step of their internal process, which is when you have the opportunity to object,” said Scurtu. “In each of these steps, you have between 30 and 90 days to respond, and it’s key to get representation before one of those deadlines passes.”
If you fail to meet a deadline – or if you fail to object in a timely fashion – it will likely cost you. It could be that you will pay more in taxes. Or it might be that something that could be done at a low cost can now either not be done at all or can only be done at a much higher cost.
Scurtu has experience in assisting taxpayers with federal and state tax obligations; has represented taxpayers before the IRS and advocated on their behalf with the Taxpayer’s Assistance Service. He specialized in tax while in law school and earned his Master’s in Taxation from New York University School of Law.
“I really enjoy tax law because I’m not afraid to deal with numbers,” he said.
Beyond numbers and strategies to avoid large tax liabilities, the best advice for businesses is to keep good records and be prompt if questions arise.
“It helps to show that you are on the ball and that you are engaging and active in responding to the assessment,” said Scurtu. “It will always be a benefit to have your head in the game. In situations where the IRS has discretion, being current and up to date usually helps. But in any assessment or audit, reaching out to your attorney before any deadline passes is important.”
The idea? If the IRS gets in touch with you, get in touch with your lawyer right then. And be ready with records and receipts.
“There will be a deadline and an opportunity to respond at the beginning of the process,” said Scurtu. “It’s great to have your lawyer involved from the start. By having your lawyer involved from the start, taxpayers forego missing a deadline or opportunities to appeal. If left unchecked, the only opportunity to appeal may be to tax court, which will cost a lot more.”
None of that is to say that the business will have to fork over a large fee.
“It may well be that the matter doesn’t require legal representation at that time, but it is important that you have a lawyer on your side who knows about it,” said Scurtu. “If you call us, we may be involved, we may not be; but we can give you some good advice.”
It’s also important to not make assumptions. Don’t believe that an understaffed IRS won’t come after you. And if you are struggling financially, don’t put off meeting with a tax attorney out of fear you won’t be able to afford it.
“I have seen it where businesses are getting to us late and it creates more headaches; it makes the process more difficult which drives up the bill,” said Scurtu. “Maybe they have already missed their opportunity to stay within the appeals process. The idea is to stay out of tax court because if it gets there, it will be way more expensive.”
That’s the best advice when dealing with the IRS.
For the state, add in a double dose of urgency. If you are considering calling your lawyer if you hear from the IRS, you need to be already dialing your phone as soon as you open a letter from the NC Department of Revenue.
“You should be aware that if an assessment is coming from the state, you really need to reach out to your attorney because the state is much more aggressive in collections,” said Scurtu.
Overall, it’s not a good idea to ignore tax matters in hopes that they will go away.
“Maybe it will be something where we’ll take a look; that doesn’t mean you will incur large attorney fees,” said Scurtu. “If you don’t need legal representation but are involved in an audit or assessment, having a tax attorney there who knows what is going on can really help.”
Photo by Supannee U-prapruit on Unsplash
