Some of Our Success Stories | California Tax Lawyer Dennis Brager

Some of Our Success Stories

Our tax attorneys were successful over a period of about ten years in defending our client's "private annuity contract" ("PAC") offshore tax advantaged retirement plan for the years 2006 through 2008. The PAC had been challenged by the FTB on various grounds in its Notices of Proposed Assessment and later Notices of Action, including the lack of economic substance. The FTB also imposed a so-called "NEST" penalty. We represented the client through the FTB audit level, the FTB appeal level, and then through filing of an appeal of the FTB's Notices of Action with the California Office of Tax Appeals ("OTA"). During this time the federal statute of limitations on tax assessments for those years expired before the FTB could transmit any final result in the case to the IRS. This resulted in the client paying nothing additional in federal income tax for those years. Our attorneys were then able to settle the OTA case involving the state tax liabilities, with the FTB conceding 25% of the asserted state tax liability despite its characterization of the plan as a "tax shelter." The settlement terms also included (i) an agreement that the FTB would seek no further tax payments in later years when the assets invested in the PAC and its investment returns were to be subsequently distributed to our client some 20 years later; and (ii) an agreement for the FTB to abate substantial accrued interest due to the FTB's long delays in processing the administrative appeal case.

Our tax attorneys were able to successfully settle a case involving an FTB tax audit asserting substantial deficiencies related to the determination of our clients' basis in his former home. The clients had purchased the property many years ago and had substantially remodeled and added to the home built thereon, but over the years had lost or misplaced many of the documents evidencing the remodeling and addition costs. Prior to our tax attorneys being involved the FTB alleged that false documents had been submitted to it. Our tax lawyers were nonetheless able to avoid any criminal prosecution of the clients and dissuade the FTB from imposing a civil fraud penalty. Our tax lawyers also obtained a significant reduction in the tax deficiency amount asserted in the FTB's Notice of Action.

Our tax attorneys represented a U.S. citizen living and working overseas who had failed to file his 2014 federal income tax return despite earning nearly $500,000 in his profession that year. The IRS subsequently prepared a "substitute for return" for his 2014 tax year, which included all of his income (based on the IRS' records) for that year, but which allowed him no exemptions, deductions or tax credits to which he was properly entitled. The IRS then issued a Notice of Deficiency to him demanding payment of about $275,000 in tax, failure to file and failure to pay penalties, and interest for that year. After filing in the United States Court, our tax lawyers were able to demonstrate that the client was entitled to various exemptions, deductions and foreign tax credits, and the IRS eventually conceded as a "no change" decision, meaning the client was required to pay nothing additional in tax, penalty or interest for that year.

In a protest and appeal of a proposed IRS Trust Fund Recovery Penalty (TFRP), our tax attorneys were able to convince the IRS that our client, who owned a 30% in interest in the corporation's business, who was a corporate director and the corporation's secretary, and who had signature authority on all corporate bank accounts, was nonetheless, not a "responsible person" who should be held liable for the trust fund portion of the corporation's unpaid employment taxes. This resulted in a full concession by the IRS as to the proposed penalty.

Our tax attorneys were able to convince the Internal Revenue Service to agree to a monthly installment agreement payment amount of $40,000 for a corporation that owed almost 3 million dollars in unpaid employment taxes, a repayment term of nearly 6 years. Further, we were able to persuade the IRS that no Trust Fund Recovery Penalty (TFRP) assessments should be made against the primary "responsible person" of the entity, the corporation's president, chief executive officer and shareholder, pending the successful completion of the installment agreement's repayment terms.

Our tax lawyers successfully defended a restaurant against the California State Board of Equalization (BOE) in a three-year sales tax audit, limiting the total adjustment amount agreed upon for that period to $64,000, notwithstanding that this new restaurant business had used an improperly installed and calibrated point of sale ("POS") system and had incorrectly prepared its sales tax returns for the audit period in question. Further, we were able to convince the SBE to refrain from imposing any negligence penalty on the taxpayer and to afford the taxpayer a 24-month installment agreement to fully pay the liability off over time.

Our tax attorneys successfully defended a taxpayer clothing manufacturer located in the Los Angeles garment district that had received IRS notification that it was selected for auditing relating to Form 8300. The Form 8300 is used to report receipt of cash payments greater than $10,000. However, our taxpayer was located in a new "Geographic Targeting Zone" which instead required that cash payments of more than $3,000 be reported on Form 8300. The taxpayer claimed that it had never received the Geographic Targeting Order requiring the filing of Form 8300 for the lower amount, although the issue had been widely reported in the popular press because of concerns by FinCent that the Los Angeles garment district had imposed the Geographic Targeting Order. The audit was closed as a "no change" audit with no tax or penalties owed or imposed.

When the IRS insisted on a penalty of over 7 million dollars our tax litigation lawyers advised our clients to "opt out" of the IRS' Offshore Voluntary Disclosure Program (OVDP). Although it took several years of hard fighting we successfully negotiated a settlement with the IRS under which our clients paid only $50,000 in non-willful FBAR penalties. This was despite the fact that there was also a significant underpayment of tax which had not been reported on the tax returns. Part of the reason that we were able to negotiate such a successful settlement was that our clients were willing to "hang in there" despite IRS threats of penalties in excess of 36 million dollars if our clients opted out.

Our tax lawyers successfully defended an IRS employment tax audit of a California newspaper distributor. We were able to minimize the taxes due to only $2,210. Plus, we limited the audit period to only one year although the IRS initially wanted to expand the audit to three years.

After the IRS audited our client and found taxes due of $120,915 over a three-year period, plus the FTB audit identified an amount due of $39,935, we requested and obtained a re-audit. All of the taxes due were reduced to zero.

Our tax lawyers successfully defended a corporate employee against imposition of an IRS trust fund recovery penalty (“TFRP”). The IRS sought to impose personal liability against the employee for unpaid corporate employment taxes of $332,582. We were able to reduce the TFRP liability to zero.

When the IRS demanded a miscellaneous penalty of $341,702 under the 2009 Offshore Voluntary Disclosure Program (“OVDP”), our attorneys successfully obtained “nonwillful” treatment. Our client’s IRS penalty was reduced to $40,000.

Our lawyers successfully handled an IRS corporate income tax audit of a software technology company. The amount of taxes due was only $1,702, and we were able to limit the audit period to one year only.

The IRS sent our client, a medical transcription company, a Notice of Determination of Worker Classification. The Service sought employment taxes from our client of $477,618 (plus interest) for a year period. We filed a lawsuit in the United States Tax Court, and on the eve of trial the IRS conceded that our client owed nothing. We also obtained attorneys’ fee award for client against the IRS on the ground that the IRS’ position in Tax Court was not substantially justified.

Our tax litigation lawyers negotiated a 40 percent settlement reduction of taxes due based upon the hazards of litigation faced by the IRS. We reduced the assessed income tax liabilities for three years from the $682,882 asserted by IRS to $405,495. Then we successfully negotiated with the IRS for an offer in compromise that reduced our client’s liability further to $156,809.

The Brager Tax Law Group obtained an offer in compromise of $234,411 for a commercial real estate broker who owed the IRS $1,368,000 for an eight year tax period. We obtained an 83 percent reduction in taxes due. We also obtained an installment agreement of $2,000 per month for the client’s state income tax liability of $331,000.

Our tax lawyers successfully defended clients against FTB income tax assessment of $716,221, with liability reduced to zero; also prevented clients’ names from appearing on FTB published list of largest tax liabilities in California.

Our tax lawyers obtained abatements and refunds of IRS and FTB penalties for failure to timely file tax returns, failure to timely pay tax, and failure to make estimated tax payments for clients due to physical and emotional illnesses, death in family and burden of caring for autistic child; total of $365,243 in penalties and interest refunded to clients.

The California State Board of Equalization (SBE or BOE) issued a Notice of Determination to our client, a gentlemen’s club, claiming it failed to report over 4.5 million dollars in drinks, and billed it over $400,000 in California sales tax, penalties and interest. Over a three year period our tax litigation attorneys were able to convince the BOE that all of the sales had been reported, and all of the sales tax had been paid, resulting in the BOE dropping all claims. Our client paid nothing to the BOE.

Our client filed a joint return with her spouse, a successful lawyer earning over $500,000 per year. Although he promised her he would pay the $150,000 tax due, he never did. After they were divorced he refused to pay, and when she applied to receive innocent spouse treatment he fought “tooth and nail” to make sure she remained liable for the taxes. Nevertheless, our tax lawyers prevailed, and the Internal Revenue Service granted innocent spouse status.

The Internal Revenue Service (IRS) had assessed a Trust Fund Recovery Penalty (TFRP) against our client for unpaid payroll taxes Our California tax attorneys filed a request for a collection due process hearing and convinced the IRS Appeals Officer that its determination that the client was liable for the TFRP was erroneous in its entirety saving our client almost 1million dollars.

Our client received a refund of payroll taxes his accountant recommend he pay to the Internal Revenue Service (IRS) after our tax lawyers demonstrated that the IRS had erroneously determined that a disgruntled independent contractor was an employee.

Our client was accused by the California Employment Development Department (EDD) of having filed fraudulent employment returns. Our tax problem lawyers convinced the EDD that their accusation was incorrect.

Our clients owed Federal income tax spanning 14 years totaling almost $300,000. Our IRS tax problem lawyers arranged for an installment agreement which limited the payment of tax to $90,000 over the term of a multi-year installment agreement.

Our client had a previous criminal tax conviction as she pled guilty to two counts of filing a false tax return pursuant to Internal Revenue Code § 7206(1). When the case was returned to the Internal Revenue Service (IRS) civil division the IRS claimed that our client owed over 3 million dollars in tax, interest and a tax fraud penalty pursuant to Internal Revenue Code § 6663. After our tax lawyers filed a petition with the United States Tax Court the IRS agreed to reduce the amount due to less than $150,000 plus accrued interest.

The Internal Revenue Service (IRS) had served a tax levy on our client’s social security checks for Federal income taxes covering 8 years of over $75,000. Our tax problem lawyers convinced the IRS that our client couldn’t afford to make even minimal payments, and the IRS released it’s tax levy, and agreed to stop all collection efforts.

Our client was assessed California payroll taxes in excess of $60,000. After he failed to pay these amounts the Employment Development Department (EDD) served a levy on his bank account, and took all of the funds. After a hearing before an administrative law judge of the California Unemployment Insurance Appeals Board, we convinced the judge that our client was not liable for these payroll taxes and the EDD sent a refund of the entire amount, plus interest.

The Internal Revenue Service (IRS) assessed late filing and late payment penalties pursuant to Internal Revenue Code § 6651, plus interest, of almost $500,000 against our client for a three year period. We filed a petition with the United States Tax Court, and convinced the IRS attorneys to wipe out all of the penalties and associated interest.

Our client was the controller of a corporation which failed to pay all of its California sales taxes. After it went out of business, the State Board of Equalization (SBE or BOE) billed our client PERSONALLY approximately $300,000 for the unpaid sales taxes. After a hearing conducted by the State Board of Equalization’s legal division, the BOE agreed that our client was not liable for any portion of the $300,000 delinquency. We were advised that this was the first time that a controller was exonerated from personal liability for sales taxes incurred by a corporation.

While she was married our client incurred joint income tax liabilities in excess of $1,000,000. We were able to convince the Internal Revenue Service that our client was an innocent spouse pursuant to Internal Revenue Code § 6015, and the IRS wiped out her entire tax bill.

The FTB had levied our client to collect joint tax liabilities in excess of $500,000. We were able to get the levy released and ultimately received innocent spouse status for our client.

Prior to retaining our firm, the client’s previous tax attorney had filed a request with the IRS for innocent spouse relief. The IRS only granted innocent spouse status for 2 of the 7 years requested, and was still attempting to collect approximately $90,000 from our client. After this firm filed an appeal the IRS granted our client innocent spouse status for the remaining 5 years.

Our client engaged us after he had pled guilty to criminal tax charges of filing false income tax returns with the California Franchise Tax Board. Although the FTB originally demanded restitution payments of almost $100,000, we successfully negotiated with the criminal investigation division of the FTB to reduce the restitution payment to approximately $40,000, even though the FTB criminal special agent had previously told the client’s criminal attorney that no reduction was possible.

Our client owed income taxes to the IRS for 6 years totaling over $131,000. The IRS accepted an offer in compromise for $29,861.

As a result of a conviction of criminal tax fraud by the State of California Franchise Tax Board, our client, a doctor owed over $500,000. Although he was not eligible for an offer in compromise we successfully brought a lawsuit against the FTB and settled for less than $100,000.

Dennis Brager was appointed by the Los Angeles County Superior Court in a criminal case as an expert in Employment Development Department issues to consult and testify pursuant to §§ 730 and 952 of the California Evidence code and § 987.2 of the Penal Code.

Our client owed over $4.3 million for 1982 through 1986. The IRS rejected a previous offer in compromise by the taxpayer which was prepared by his CPA. The IRS accepted our offer in compromise for $251,000.

We convinced the IRS that there was reasonable cause for a corporation’s failure to timely deposit and pay trust taxes. As a result the IRS abated approximately $100,000 in interest and late payment penalties it had assessed.

At the time this client came to us the IRS had levied on his wages for a trust fund recovery penalty of approximately $60,000 after his CPA had submitted several unsuccessful offers in compromise. Ultimately the IRS conceded that no tax was due.

Our clients were the owners of a closely held family company. After an audit the IRS claimed that the compensation paid to them was unreasonable, and therefore disallowed $750,000 per year in deductions over a multi-year period. The case was referred to our firm by a tax attorney who had spent over two years negotiating with the IRS, without achieving a settlement. Our firm negotiated a settlement with the IRS that saved our clients $2.1 million in tax, penalty and interest.

Our client owed approximately $100,000 in payroll taxes, and income taxes. Through our efforts the IRS agreed to accept $7,500 in full payment.

The IRS claimed our client owed almost $2 million dollars in income taxes due to alleged errors on his tax returns. After filing a petition with the United States Tax Court we settled the case for approximately $20,000.

Our client owed the IRS $110,000 in income taxes. The IRS accepted an offer in compromise for $12,600 paid over 24 months at $525 per month.

Our client, an evangelical church in Los Angeles, owed the IRS almost $200,000 in payroll taxes based upon a failure to withhold taxes on earnings of school employees. We convinced the IRS to waive almost $90,000 of penalties and interest.

Our client owed over $450,000 in income and payroll taxes. Through a series of actions including the filing of a case in United States District Court, a bankruptcy and an offer in compromise we resolved his debt for $39,230.

Our firm litigated a case before the California Unemployment Insurance Appeals Board resulting in relieving a corporate officer of a California Employment Development (EDD) claim for over $200,000 in personal liability for California payroll taxes which the EDD argued were due under the EDD's equivalent of the trust fund recovery penalty.

We negotiated a $15,000 offer in compromise with the IRS in settlement of $130,000 in taxes.

Our client owed the IRS $120,000. Even though he was earning over $170,000 per year, owned a home and held $30,000 in a retirement plan we settled for $40,000. Prior to our involvement the IRS Appeals officer told the client in writing that he wouldn't settle because the client could afford to pay over $200,000.

The IRS claimed our clients owed over $35,000 as the result of an audit. Due to technical errors made by the IRS we were able to convince the IRS to abate the full amount of the taxes and to refund amounts previously paid.

Our client, a doctor, owed the IRS over $1.5 million in income taxes. Although he had previously filed for bankruptcy using the services of another law firm, the IRS claimed that the taxes were still owed. Through negotiations and a properly timed second bankruptcy the tax debt was reduced to approximately $10,000.

Our client owed the IRS approximately $75,000 in income taxes. The IRS accepted an offer in compromise for $1,500 in full payment of her tax debt. In additional the California Franchise Tax Board (FTB) agreed to treat her $100,000 tax debt as permanently uncollectible without any payment at all.

Our client owed over $170,000 in federal income taxes, and the IRS had already served a levy on her bank account. We convinced the IRS that she was an innocent spouse, and all of the money was released. In a separate proceeding we obtained innocent spouse treatment from the California Franchise Tax Board (FTB).

Our client, an estate, was charged late filing and late payment penalties of over $320,000 based upon a failure to timely pay and file the Estate tax return. After the Estate paid the amounts claimed to be due we were able to obtain a full refund of the amount paid plus interest.

Our client incurred a tax debt of over $310,000 due to a trust fund recovery penalty imposed because he was a responsible officer of a corporation which failed to pay its payroll taxes. We negotiated an offer in compromise with the IRS for $33,000 even though our client was earning in excess of $100,000 annually.

The IRS determined that our client owed a tax debt of approximately $61,000 based upon a trust fund recovery penalty imposing personal liability for corporate payroll taxes. After our intervention the IRS Appeals Division conceded that a mistake had been made and that our client didn't owe any portion of the trust fund recovery penalty.

Our client had a tax debt for personal income tax in excess of $130,000. Although he had substantial assets we convinced the IRS to accept an effective tax administration offer in compromise for $2,500.

The IRS determined that our client owed a tax debt of approximately $155,000 based upon a trust fund recovery penalty imposing personal liability for corporate payroll taxes. We convinced the IRS that our client was not a responsible officer and nothing was owed.

Our client, an entertainer, owed in excess of $1 million. We negotiated an offer in compromise which settled the case for 24 monthly payments of $16,000, allowing our client to keep her interest in a pension plan with assets of almost $500,000.

Our client was assessed California payroll taxes by the California Employment Development Department (EDD) for over $300,000, including a fraud penalty for an 8 year period. After a two day hearing before an administrative law judge of the California Unemployment Compensation Appeals Board the EDD conceded the case, and issued a refund check for approximately $9,000.

Our client received a statutory notice of deficiency from the IRS after an audit claiming that over $230,000 was owed. After filing a petition with the United States Tax Court a settlement was negotiated for less than $4,600.

An offer in compromise submitted by our client's accountant was rejected when the IRS determined that he could afford to pay the total tax due of over $131,000. We convinced the same IRS specialist in offer in compromise to accept less than $30,000.

Our clients owed over $600,000 in payroll and income taxes to the IRS. The IRS Appeals Division Officer accepted an offer in compromise of approximately $270,000 even though the Appeals Division Officer had previously been unwilling to accept less than $386,000 from the clients' prior attorney.

After an audit the California Franchise Tax Board (FTB) billed our client for over $ 2 million. Our client paid the tax, and filed a claim for refund which was denied by the FTB. After we filed a petition with the California State Board of Equalization (SBE), we negotiated a settlement with the FTB which resulted in our client receiving a refund of all the money he paid, plus interest.

A small food supply company owed the IRS over $400,000 for allegedly intentionally failing to file in IRS Form 8300 which is used to report cash payments over $10,000, and the IRS was threatening to levy on our client’s bank accounts, and other assets. We obtained a stay of IRS’ collection action by arguing that the IRS had not properly afforded our client appeal rights. We then convinced the IRS that any errors by our client may have been careless, but not intentional. The IRS reduced the penalty to less than $1,200.

These statements do not constitute a guarantee, warranty, or prediction regarding the outcome of your legal matter.