We have written before that when a Minnesota taxpayer is in a dispute with the IRS, it’s important to have the right representation. The level of success may well depend not only on whether you have a qualified accountant at your side, but also if you have an experienced tax lawyer with you.
Every case is different and the form of controversies with the IRS can be many. It may involve a complex audit or examination. Agents may seek to draw an innocent spouse into the sphere of investigation. Right now, the Offshore Voluntary Disclosure Program is generating a lot of action. The threat of litigation or even criminal prosecution can’t be dismissed either. Experience matters.
This is something that the operators of a small business in Connecticut have come to understand all too painfully. Three years ago, armed IRS agents stormed their place — a restaurant and a wholesale bakery of Italian bread. They left with $68,000.
The company is nearly 100 years old and still in the same family, run by two brothers. Up until a few years ago, the restaurant operated on strictly a cash basis, and apparently that may have been part of the reason the IRS flagged it.
Officials alleged the business had made many cash deposits in sums below the $10,000 amount that would require the bank to report the transactions. They said such behavior is called structuring and is often associated with criminal activity. A law allowing civil asset forfeiture led to the cash seizure.
The brothers maintain the deposits were due to the mainly cash business they conducted and one reason they were below the $10,000 threshold was that they wanted to make life easier for the bank. A representative had told them that any deposit over the limit required an employee to fill out government forms.
It has taken three years of fighting and the filing of a lawsuit, but the brothers now have a pledge that they’ll get their money back from the IRS. Now the federal prosecutor in the region says he’ll conduct an investigation into the bakery seeking grounds for possible criminal action.
One attorney representing the brothers observes the process is completely backward from what it should be. He says his clients have already been punished by the government, and pressured to plead guilty to criminal charges, but since they’ve refused, they face a government investigation.
Source: The Huffington Post, “IRS Returns Bakery’s Money After 3 Years. Now It Wants To Put The Owners In Prison,” Nick Wing, May 25, 2016