Significant Tax Case Victories & Tax Controversy Case Results
For 30+ years, Paul W. Raymond has been piling up successful case results. Orange County Tax attorney, Paul W. Raymond, has defended taxpayers — individuals and businesses– before the IRS, FTB, EDD, SBE, and both the Federal District, Tax court and State Courts. “I have enjoyed consistent and numerous positive verdicts and outcomes for my clients.”
Success Story – Obtained a complete victory for a City in the greater Los Angeles area — the IRS had imposed a civil penalty of $2.5 million against the City relating to the filing of the City’s payroll tax returns. After one meeting with the IRS, the IRS agreed to abate the penalty in full.
Case Results – Defended an ex-politician who ultimately received no jail time and instead was confined to his home. The Federal Bureau of Investigation (FBI) began investigating my Client several years ago for bankruptcy fraud. The United States Attorney’s Office agreed not to prosecute the Client for bankruptcy fraud, tax evasion, or similar alleged crimes. The Client pled guilty to providing a false statement, but was ordered to home confinement for 6 months.
Obtained an 11-1 jury verdict which resulted in a mistrial. My Client, a CPA, was brought up on charges of preparing false and fraudulent tax returns for his clients. The jury believed his testimony that he was acting in good faith and refused to find him guilty. Rather than proceed with a retrial after the mistrial, the Government agreed to a “misdemeanor” plea of guilty. My Client was given straight probation, zero jail time.
Case Results – Obtained the first victory on record against the U.S. Department of Justice who sought an injunction prohibiting my Client, an accountant, from preparing tax returns for his clients. Some years ago, the Department of Justice began investigating tax return preparers who they felt were cheating the public. The weapon of choice was to obtain an injunction against the tax return preparer from preparing tax returns. Typically this civil investigation was accompanied by a criminal investigation of the tax return preparer, making it very difficult to defend the Client (i.e., because if he says anything in the civil case, it could be held against him in the criminal case). Nevertheless, in a case of first impression, the local District Court Judge held that my Client should not be subject to an injunction prohibiting him from preparing tax returns for his clients.
Defended a local businessman who, according to the Internal Revenue Service and the State Board of Equalization, failed to report all his company’s income and expenses. The U.S. Department of Justice filed criminal charges, but with a plea agreement, the Client paid the Internal Revenue Service the money owed, and avoided jail. The State Board of Equalization ultimately dropped it’s criminal investigation of my Client.
Conducted an extensive internal investigation involving an alleged kickback scheme involving a soon to be public company and its subsidiaries.
Represented a local businessman who was audited by the Internal Revenue Service with the case ending up in the U.S. Tax Court. The Government agreed that my Client was entitled to a refund of over $800,000. Despite owing the IRS several hundred thousand dollars, my Client did not have to pay any penalties.
Defended several Clients (approximately 15) who were part of a massive tax fraud investigation into alleged unreported income. Most of these individuals were in their early 20’s, and this was their first job. The Department of Justice declined, in several of the cases, to prosecute them. In the cases that went forward, some cases went from a “felony” charge to a “misdemeanor” charge. In all of the cases except one, the individuals did not receive any jail time.
Advised a religious organization about the consequences of losing their tax exempt status based on their improper use of funds. The organization agreed with my advice, filed the appropriate correcting or amended tax returns, and was able to conduct business as usual. The IRS agreed not to assert any penalties.
Represented and defended a large computer company in Southern California in which the IRS contended that the company had failed to pay the correct amount of “ozone depleting chemicals tax ,” which is an “excise tax.” The IRS launched an investigation of several companies, stating that they had not paid the ozone depleting chemicals tax on products they imported from the Far East. The result was a complete victory for the company, i.e., a “no change” audit result. This led to the referral of other companies with the same result.
Represented a Canadian citizen who owed money to Canada. Revenue Canada (i.e., Canada’s version of the IRS), asked the IRS through a “protocol” (which is similar to a treaty) to help pursue my Canadian Client.. At first, the IRS refused to give my Client has “taxpayer rights” but then they relented. Ultimately, no harm came to my Client. He was not deported and is doing well here in the United States.
Defended a CPA being investigated by the Internal Revenue Service, Criminal Investigation. The CPA specialized in equine law, and the IRS noticed an unusual number of his clients who had losses. Criminal Investigation, after one interview with me, agreed to drop the criminal investigation.
Case Results – Obtained a Jury Verdict in favor of my Client in U.S. District Court, against the IRS. My Client was assessed the Trust Fund Recovery Penalty under 26 U.S.C. Section 6672 for the unpaid employment taxes of his employer. The jury agreed with me that my Client did not have “responsibility” or acted “wilfully” under the law for imposition of the civil penalty.
Handled numerous “Estate Tax” audits, resolving them at the audit-examination level, or in Tax Court, on a variety of issues.
Have enjoyed success with “residency cases” involving the California Franchise Tax Board (FTB). The FTB aggressively pursues individuals who claim to have changed their residence to another State and hence no longer have to pay California State Income Tax. Over the years, we have negotiated several settlements with the FTB on these issues.
Resolved a large case audit with the California State Board of Equalization. The company had been audited previously by the SBE and had been informed by the tax auditor, in the closing/exit interview/meeting, that for the future my Client was to file and report tax in a certain manner. Years later, another tax auditor audited my Client and decided that the advice by the prior auditor was wrong and tax should have been reported and paid. The SBE agreed, after some arm twisting, that they were “estopped” from pursuing my Client for the unpaid tax based on the erroneous advice that was given to them.
Success Story – Resolved an Employment Development Department case on the eve of trial. My Client’s former representative had dropped the proverbial ball as he had failed to demonstrate and establish to the satisfaction of the EDD , that they workers engaged by my Client should not be reclassified as his employees. The case was set for trial (actually an administrative law hearing, similar to a trial), and fortunately the Administrative Law Judge and the EDD supervising auditor agreed to continue the matter. The result was a “no change” in classification, saving the Client hundreds of thousands of dollars.
Testified, as an “Expert Witness” in defense of a CPA firm whereby they were accused of not providing effective representation on IRS and EDD tax matters.
The jury decided in favor of the CPA firm.
Served as a “Consulting Expert” in various cases, where I was retained to give consulting advice to law firms or CPA firms.
Provided support to bankruptcy counsel in numerous cases involving “discharge of taxes” in bankruptcy or the applicability of various provisions of the Internal Revenue Code to a debtor’s situation.
Defended a car auction business from IRS accusations that they failed to properly report and file IRS Form 8300, Report of Cash Payments Over $10,000 Received in a Trade or Business. The IRS sought substantial penalties for the failure to file the IRS Form 8300, over several years. The end result was a modest penalty and no other consequences. The case was being considered for referral to the IRS Criminal Investigation but that, of course, did not happen.
Defending taxpayers before the IRS who are accused of participating in so-called Abusive Tax Avoidance Transactions (ATAT).
SUMMARY: Over the almost 30 years of practice , I have represented many clients, individuals and businesses, in a variety of tax matters before the Internal Revenue Service, the Franchise Tax Board, the Employment Development Department, and the State Board of Equalization, and before the Courts, both Federal (United States District Court and United States Tax Court) and State.
Some of those tax matters, industries and areas are listed below:
- Employment Tax Examinations – i.e., independent contractor versus employee
- Excise Tax Examinations – IRS regarding, for example, gambling, oil and gas, ozone-depleting chemicals, trucking.
- Estate & Gift Tax Examinations – IRS regarding, for example, estate tax freeze, family limited partnerships, allocations.
- National Research Program (NRP) examinations – IRS
- Jeopardy & Termination Assessments – IRS and the California Franchise Tax Board, State Board of Equalization
- Transferee Liability Cases – IRS, California Franchise Tax Board, State Board of Equalization
- Innocent Spouse Cases – IRS, California Franchise Tax Board
- Return Preparer Program Cases – IRS and the California Department of Consumer Affairs, Board of Accountancy
- Audit Reconsideration Cases – IRS, California Franchise Tax Board, State Board of Equalization
- Bank Secrecy Act Cases
- Exempt Organizations Examinations – IRS, religious organizations, private and charter schools, social and recreational clubs
- Federal, State and Local Governments – IRS, California
- Employee Plans Examinations – IRS
- Pass-Through Entities – IRS, California Franchise Tax Board, S corporations, TEFRA (The Tax Equity and Fiscal Responsibility Act of 1982) partnerships, LLC’s (Limited Liability Companies)
- Whistleblower Awards – IRS & various States
Audits-Examinations Involving Various Industries – All taxing Agencies:
- Architects & Landscape Architects
- Business Consultants
- Cash Intensive Businesses (bail bonds, beauty shop, car washes, coin operated amusement parks, laundromats, convenience stores)
- Construction Industry
- Executive Compensation
- Fringe Benefits
Other Audit Areas:
- IRC 162(m) Salary Deduction Limitation
- Golden Parachutes
- IRC 183: Activities Not Engaged in For Profit
- Lawsuits, Awards, and Settlements
- New Vehicle Dealership
- Non-Qualified Deferred Compensation
- Oil and Gas Industry
- Passive Activity Losses
- Research Credit Claims: Credit for Increasing Research Activities 41
- Retail Industry
- Stock Based Compensation
- Structured Settlement Factoring
- Wine Industry