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Dallo Law Group Wins Major Settlement

After an exhausting income tax audit in 2019, clients sought our help to assist them with a major IRS Notice of Deficiency. Unfortunately, their CPA dropped the ball and did not file a tax court petition to respond to the deficiency, which in turn had our clients slammed with over $116,000 in additional taxes and penalties. To make matters worse, they were now in the midst of aggressive collections proceeding from not only the IRS, but also the California Franchise Tax Board (FTB) that caught on to the IRS audit and adjusted the clients’ account for an additional $23,000 in taxes and penalties for the state.

Nothing to take lightly, a Notice of Deficiency, also known as a Statutory Notice of Deficiency, Stat Notice, or 90-day letter, is the final notification a taxpayer will receive before the IRS makes its final assessment of tax due. The letter lets the taxpayer know how much additional tax the IRS is proposing and why. If you were ever to receive such correspondence, the best choice you could make is to hire a well-seasoned tax attorney to review the reason why the IRS is proposing additional tax. If you wait, or try to handle the matter on your own, the situation can very quickly get dicey and spiral out of control.

Our attorneys at Dallo Law Group assisted the clients with a collections resolution for both the IRS and FTB. The first strategy we implemented was with the IRS. We quickly filed a “Doubt as to Liability” Offer in Compromise. This action allowed us to be able to provide evidence and back up in support of our clients’ originally-filed tax return. After that, the IRS reversed over 50% of the original audit assessment and completely abated the assessed accuracy penalties.

Once our attorneys reached an agreement with the IRS, we then filed a protest to the FTB’s additional assessment that resulted in reversal of nearly $15,000 of California state tax. Finally, we negotiated payment arrangements that best suited our clients with both the IRS and FTB for the remaining balance due.

Much to the relief of our clients, they can now rest easier knowing they are free of the debilitating debt that both the IRS and the California FTB had aggressively imposed. Their total tax savings is estimated to be approximately $60,000. If you are ever faced with a tax bill or a notice that an audit will take place, take immediately action and reach out to us at Dallo Law Group for assistance through these complicated processes.