Tax Law Planning Defense Successes And Victories

Notice: The following are examples of actual cases handled by this office. However, previous successes are no guaranty of the same or better success in future cases of the same or similar nature. As with all lawyers, Yahnian Law Corporation is prevented by ethics and professional conduct rules as well as insurance carrier parameters, from making and makes no guarantees of any kind regarding the results of any matter.

Dedicated to helping our clients keep what’s theirs

  • “Yahnian Law Corporation obtained results for us against the IRS that no one else we had been to could” Richard C
  • “Other attorneys and CPAs said our case was a certain loser when we went to see them about representation, but Yahnian Law Corporation took over the matter and won it for us.” Tom
  • “If you’re not asking for or getting tax planning advice, you are not saving taxes, and, in fact, may be paying more taxes than you legally owe.” Steve Yahnian
  • “When dealing with the taxing authorities, attack when appropriate, retreat when strategically necessary, and stand your ground when neither of the first two options are available or necessary. The secret is knowing when you are in one or the other of the circumstances that evokes which position to take.” Steve Yahnian
  • “Ever wonder why the IRS calls it Form 1040? Because for every $50 that you earn, you get 10 and they get 40.” Anonymous
  • “It ain’t over till it’s over.” Yogi Berra

We have achieved many successes, oftentimes far better than expected, for those who have been audited by or owed taxes to the taxing agencies, IRS and California. We have handled a large number of such cases and have many years of in depth experience. Following is a small sample of the many matters we have successfully and victoriously handled.

  • CPA contacted me to handle appeal of IRS audit of  tax return the CPA had prepared for his business client. IRS auditor had assessed nearly 3 million dollars in taxes, interest and penalties after audit of the tax return. CPA was reluctant to handle matter.  So, they contacted me to handle the appeal to IRS appeals. I wrote legal arguments in opposition to IRS auditor assessment. At appeals hearing, IRS appeals agreed that the assessment was wrong  and ruled in favor of the taxpayer. Three million dollar assessment was totally reduced.
  • Successfully negotiated an IRS Offer in Compromise for client reducing tax assessment from over $200,000 to around $7,000. IRS had assessed ‘Responsible Person’ penalty against individual taxpayer for unpaid corporate level payroll taxes in the sum of over $200,000. Taxpayer then came to this office and became client. This office prepared an offer in compromise for a much lesser amount. After IRS rejection at lower level, we appealed to IRS Appeals office. We prepared legal arguments and assembled data supporting much lower ability of client to pay. We were then able to negotiate settlement with IRS for a sum of around $7,000. Client was able to resume a normal life including being able to pay for critical medical and dental treatments that they had been delaying due to costs and IRS matter.
  • Client came to office with several IRS tax liens filed against him. He had been to other tax advisors, with no relief. First, we attempted an offer in compromise, but this was during the time frame when IRS was overly strict and unreasonable about offers. However, we noticed that it had been several years since the tax assessment and that bankruptcy was a possible solution. This office prepared and filed a bankruptcy petition for the taxpayer and obtained full discharge of all income taxes and release of all tax liens.
  • A CPA had represented a client on a U.S. Tax Court matter against the IRS. Just prior to the time of trial, the CPA and client hired Yahnian Law Corporation to take over the matter scheduled for trial in less than a week. Tax liability reduced by 50%.
  • The Client’s CPA prepared a tax return indicating a large tax liability due to debt forgiveness. Client could not pay the tax. IRS and FTB began to seize the client’s tax refunds. The Client came to us. Through investigation, we discovered that the debt had been forgiven through bankruptcy, making the cancellation of debt not taxable to the client. Amended tax returns were prepared and filed for Client. Client not only had the tax debt go away, they received a refund, with interest, from both the IRS and FTB.
  • The Client had been assessed $350,000 in payroll taxes and an SBA loan default. Through Offers in Compromise with each governmental agency prepared and submitted by Yahnian Law Corporation, the amount that was settled for and paid totaled $36,000. The matter closed. Client got his life back.
  • On a large tax matter, we obtained results for the client that no other Attorney or CPA had been able to obtain. The client had been to two other law firms and a CPA firm before he came to Yahnian Law Corporation.
  • Saved client’s retirement plan from levy by the IRS.
  • Client failed to pay IRS payroll taxes on employee salaries amounting to $1,300,000 with interest and penalties, due to failing business. IRS began collection. Client attempted several offers in compromise with IRS on their own, failing each time. With the prospect of losing their assets and having their wages garnished, clients hired Yahnian Law Corporation to represent them. Yahnian Law Corporation worked out a settlement of the tax debt for a payment of $72,000. IRS released their liens and client got their life back and a fresh start.
  • Formulated and implemented a business and tax plan saving client substantial taxes
  • Yahnian Law Corporation battled the IRS in U.S. Tax Court on a 4 million dollar assessment that appeared hopeless to the client, other attorneys, and its CPA. The matter was settled for 50 cents on the dollar.
  • In a case of gaining victory in what looked like certain defeat to the client, the client, facing a daunting $150,000 EDD assessment as a ‘responsible person’ of the corporate employer (that did not pay over payroll taxes), was found not liable by the administrative judge, after the administrative hearing.
  • A client and his spouse came into the office with a $2,000,000 plus federal income tax bill. Based on the facts they told me, some tax liability was owed, but not to that extent. They had ignored a notice from the IRS that would have allowed them to challenge the assessment in Tax Court and without first paying the tax liability. As a result, their choices were severely limited by the time they saw me. However, I immediately took the only steps that were possible to challenge this assessment without paying any taxes. At that point the only courts with jurisdiction would have been the U.S. Federal District Court or U.S. Claims Court in Washington, D.C. But, those courts can only hear cases where the Taxpayer pays the taxes first. Of course, this was not feasible. I took a different approach and was able to get IRS to reduce the assessment from $2,000,000 to approximately $300,000 without having to go to court.
  • The Client had been audited by IRS. IRS assessed the Client nearly $40,000 in taxes, interest and penalties. At that point, the Client contacted and hired Yahnian Law Corporation to fight the IRS and their assessment. Yahnian Law Corporation took immediate steps to prove that the IRS assessment was in error. This involved a thorough review and analysis of Client’s books and records as well as advocacy to the IRS auditor. Verdict: IRS agreed to reduce the assessment to under $200. Yahnian Law Corporation achieved a surprising and complete turn-around victory for the Client.
  • California State Board of Equalization assessed purchaser of motor home use taxes from purchase of RV that was to be used out of state. We obtained complete exoneration of tax assessment. Client owed nothing.
  • IRS disallowed over $1,500,000 in deductions on a farmer’s tax returns. Farmer’s CPA referred the farmer to this office. Pursuant to the filing of a US Tax Court petition and advocacy by this office on behalf of farmer, IRS reduced the assessment to under $100,000.
  • Taxpayer was assessed substantial penalty for alleged failure to file magnetic version of w-2s with Social Security Administration. IRS asserted failure to file penalties as a result. Yahnian Law Corporation advocacy based upon SSA computer failure to read client disk, not client, was the cause. IRS abated the penalty in full.
  • CPA referred client under IRS audit. IRS attempted to disallow several million dollars in losses that taxpayer client had taken on the basis of lack of ‘material participation ‘in several small businesses and payment to himself of excess compensation by his corporation. We determined that little used section of the Internal Revenue Code allowed grouping of different taxpayer businesses in order to meet ‘material participation’ test so that ALL of those businesses when combined met the test. Also, convinced IRS that the compensation was reasonable, after all based on the law and the applicable facts and circumstances. Result: all tax losses allowed and tax savings of over one million dollars to client.
  • Client came to us after the IRS has assessed the trust fund penalty against him from a corporate business of which he was part owner and President. The IRS found that he had the authority to sign checks, get loans and bind the corporation contractually with third parties, all badges the IRS is looking for to impose personal liability for unpaid Corporate payroll taxes. However, he had not been involved in the corporation’s day to day administrative operations, but was in the field each day actually conducting construction activities. We were able to obtain a very favorable offer in compromise for the client where he settled the over one million dollar assessment for less than $10,000.
  • Client came to us after IRS had threatened to assess the trust fund penalty against her. She was the Corporation’s bookkeeper and was coerced by the Corporation’s President to forego paying payroll taxes but instead to pay other creditors. IRS audited and determined that they were going to assess the penalty against her. At that point, Client came to us. She then hired us to defend her against the IRS. We did substantial research of the facts and applicable case law in her favor, preparing a tax brief establishing the arguments totally exonerating her. On appeal, we convinced IRS she was not a ‘responsible person’. Thus, no assessment was made against her.
  • Client prepared their own tax return and subsequently were audited by the IRS. We took over the audit, found a large tax deduction that the client had overlooked, and successfully and substantially reduced the proposed IRS assessment.
  • Client transferred real property to a new LLC they had created for estate planning purposes. County assessor assessed increase in property taxes alleging ‘change in ownership’ of the real property, which gives legal basis for reassessment of property for property tax purposes, resulting in tax increases. Annual property taxes were substantially increased by the Assessor. Client retained us to challenge the increase. We discovered that the transfer qualified for an exception to the ‘change in ownership’ rules. We prepared a written analysis with supporting evidence to refute the increase and submitted it to the Assessor. Assessor agreed with our arguments and completely rescinded the increase in property taxes. We achieved complete victory for the client.
  • Client had been to numerous other CPAs and attorneys without obtaining tax relief. Client suffered from Parkinson’s disease and tax problem and IRS hounding was causing major health issues for client. We discovered that client could obtain discharge of the tax liabilities by filing bankruptcy. Client filed bankruptcy and was relieved of substantial taxes. Client was very thankful and health became better.
  • Client asked me to review the tax return prepared by their accountant to ascertain correctness and missed tax savings opportunities. Upon review I discovered that the accountant had missed nearly $100,000 in asset acquisitions during the tax year and as a result had failed to utilize the code section deduction that allows the taxpayer to deduct equipment purchases of up to several hundred thousand dollars in the year of acquisition. My discovery of these items saved the client substantial tax dollars.
  • Client consulted with us to determine if the assets they were to inherit from a trust would obtain favorable tax treatment. They had been to other estate and tax advisors including CPAs with no answer nor resolution. We reviewed the trust and the law. We discovered a little known rule with respect to a  surviving spouse that died having a special type of interest in the trust. That rule combined with the trust provision allowed for favorable tax treatment to the trust beneficiaries when they inherited the trust assets after the surviving spouse’s death.
  • Client was referred to us by their CPA. State of California SBE was alleging that the harvesting and bagging services provided by the Client were subject to sales tax. A substantial amount of sales taxes were at stake. Client has previously been to a large law firm who had been attempting to defeat the SBE on this matter, but had failed despite substantial attorneys fees, time, and voluminous written correspondence with SBE. In exasperation, the Client came to us for a second opinion on the matter and new representation. I reviewed the entire file. I concluded that the matter was winnable for the Client and prepared written legal arguments to SBE, taking a different approach and presentation of legal authorities and arguments, as contrasted to what the prior large firm that had handled the matter for the Client had done. After reading my written opinion and basis for Client taxpayer victory, the SBE conceded the matter and granted the Client complete relief from tax assessment.
  • CPA colleague hired me to review the preparation of an estate tax return. Upon review of the tax return, I noticed the CPA had failed to take advantage of valuation discounts and something call special farm valuation. I was able to point out nearly 4 million dollars of estate tax savings. The IRS audited the estate tax return. But, there was no tax increase. The CPA’s client saved 4 million dollars of estate taxes instead of having to pay that sum to the government.
  • CPA asked me to represent an estate that had an unpaid estate tax liability including interest and penalties of nearly 2 million dollars. The CPA only wanted me to work out a payment arrangement with the IRS. However, I reviewed the estate tax return anyway to make certain that the estate truly owed that amount of money. I discovered that the preparer of the estate tax return had failed to take valuation discounts that were available at the time the decedent died for fractional interests in a corporation that had substantial appreciated properties, containing something called built in gain tax. That hypothetical built in gain tax is deductible for estate tax purposes. In addition, the appraisals prepared by the  non business appraiser valuing the stock were substantially overstated compared to the new appraisal I had performed by a true business appraiser. Thus, the estate substantially overpaid the estate taxes it did pay, and had been over assessed by the IRS for the taxes IRS was saying they owed. Appeal was made to the IRS to make them aware that their demand for payment was in error and that the estate actually owed nothing.
  • A CPA contacted me concerning one of his corporate clients. The corporation was an S Corporation. However, it had lost its S Corporation status due to having excessive passive income. The only way to obtain S Status again was to apply for a private letter ruling from the IRS granting it. Important legal and tax arguments had to be made to obtain the IRS approval. We successfully obtained the grant of S Corporation status. See Private letter ruling PLR 201710013
  • CPA contacted me. Their client had been audited by IRS. IRS has found that wages paid were excessive and wanted to re-characterize  the  wages as dividends, subject to higher tax rate. IRS said that the wages paid to corporate officer/shareholder were ‘unreasonably’ high. I prepared legal arguments and presented to IRS with facts and law documenting that the wages paid were not ‘unreasonable’. IRS surrendered and our Client was victorious. Save client over 1 million dollars.
  • CPA contacted me because the EDD had assessed high UI rate on new corporation alleging that the new corporation was a continuation of another corporation. I made legal and factual argument that the two corporations were in fact owned by different people, and there was no common control or management. EDD agreed and abated to lower UI rate. Saved client $350,000.
  • EDD had been levying taxpayer bank account for decades on debt that just kept growing due to interest accrual. I reviewed the matter and discovered that the statute of limitations had run against the EDD due to the California Constitution having superiority over the EDD statutes. EDD released all liens and agreed to cease collection permanently.  Saved client over $50,000.
  • Tulare County recorder tried to impose the documentary transfer tax on LLC owned real property when LLC owner died and bequeathed LLC interest to son. I was able to  successfully argue that no DTT was due because the DTT cannot apply on a deemed transfer of LLC property when the deemed transfer is due to death, not sale of the LLC interest. My legal argument set precedent in Tulare County.
  • Innocent Spouse relief matter. Client came to us to see if there was something we could do for her to obtain relief from a community property income tax debt arising from the actions of her ex husband. We argued that she was an abused spouse, and presented documentary evidence for that fact. Based on our arguments and the facts, the IRS granted her innocent spouse relief from the debt, and relieved her of over $50,000 of taxes, interest and penalties.
  • Successfully negotiated and obtained an offer in compromise to settle California sales taxes. Settled a $70,000 demand by the State Board of Equalization for $24,000.
  • New client hired us to represent them in income tax audit. IRS had assessed over $400,000 in taxes, interest, and penalties. We took over audit from prior accountant. We successfully obtained reduction of assessment to under $200,000 and also complete abatement of all penalties.
  • New client hired us to represent them in a US Tax Court matter. IRS had assessed over $150,000 in taxes, interest and penalties. We obtained IRS Appeals review. The tax records were rebuilt, and we were able to reduce the tax liabilities by $100,000, and obtained total elimination of the tax penalties. Client tax, interest and penalty savings: $$125,000.
  • New client contacted us to defend them against IRS assessment of Responsible Person Penalty for unpaid Corporate payroll taxes.  The proposed assessment had already been made by IRS before client came to see us. We prepared written  appeal to IRS Appeals arguing that our client had not been in a position of authority or in the alternative did not act willfully. IRS Appeals agreed with us, and removed the proposed assessment. No assessment was made. Client was completely exonerated.
  • CPA hired us for tax analysis and opinion concerning taxability of damage award received by their client for employment discrimination and other claims. I found a recent but obscure tax court case on point, containing similar facts, which held that settlement proceeds received for a claim that physical illness was exacerbated by former employer was tax free. This resulted in substantial income tax savings for the taxpayer.
  • Client attempted to obtain their own  installment payment arrangement with IRS. However, IRS continued to reject them. Client came to us. We contacted IRS Taxpayer Advocate Office. Because of our case presentation to to the TAO, we succeeded where the client had failed, getting client an IPA they could afford and getting their lives back.
  • Client invested $300,000 in new franchise. The franchise became worthless. The then tax preparer for the client advised them they could only deduct up to $3,000 per year of the loss against other income. Several years later the taxpayer came to me. I found this issue while reviewing their tax returns from prior years and discovered the capital loss carryover. When client sold some appreciated property, I advised them they could now deduct the entire loss against the resulting capital gains. Substantial tax savings.
  • Successful preparation, application for and negotiation of numerous installment payment arrangements with IRS and state of California for back taxes;
  • Successful application for and obtainment of reduction of tax penalties for reasonable cause or other bases;



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