Criminal Defense

Civil Tax Controversies and Trials FAQs

It’s no secret that tax law is complicated, complex, and often downright confusing. It’s why more people than ever are going with professionals when it comes to filing their taxes, and it’s also why it’s vitally important to understand what civil tax controversies are and what these trials look like. These civil tax controversies and trials FAQs will cover:

What tax controversies are
Civil vs. criminal tax controversies
How trials get brought up
The shortcomings of audit protection
Reasons for a controversy going to court
The importance of hiring a competent tax law attorney

Put simply, you can’t afford to have tax liability. Whether you haven’t filed in the past or your filings have been inaccurate, you could be on the radar of the Internal Revenue Service or IRS. With all of that in mind, let’s look at what civil tax controversies are and how you can avoid liability.

What is a Civil Tax Controversy?

Civil tax controversy is its own area of legal practice that covers any disputes between a tax collecting entity such as the IRS and a taxpayer. This can come as a direct result of an audit, and it often does, but this is not a requirement.

Is There Another Type of Tax Controversy?

Tax controversies can be broken up into two categories: civil and criminal. In a criminal tax controversy, a ruling against a defendant could result in either probation or jail time (loss of freedom). In contrast, a civil tax controversy will typically result in penalties against the defendant (loss of assets). While civil tax controversies are less severe than criminal tax controversies, penalties should be avoided at all costs.

How Might Civil Tax Controversy and Trials Occur?

One of the most common charges pursued in a civil case is civil tax fraud. This could result in penalties that get brought up due to a taxpayer not filing their taxes or willfully filing information that they know is fraudulent. It’s important to remember that even not filing your taxes is fraud. The way this is justified is that since there is a minimum income requirement for taxpayers to have to pay their taxes, not filing yours at all even though you make the minimum income requirement qualifies as fraudulent activity.

What if I Filed My Taxes With a Service That Has Audit Protection?

It’s common to see tax filing services that offer some degree of audit protection, often for a small fee. While there is some protection here, this isn’t going to prevent the IRS from conducting an audit or discovering discrepancies somewhere along the way. There is no surefire way to prevent the IRS from finding an instance of civil or criminal tax fraud short of ensuring that your taxes are filed correctly so that there is no fraud being committed at all.

Will This Go to Court?

Not necessarily. There are only two tax controversies that tend to be prosecuted: a deficiency action or a refund action.

Deficiency Action: In a deficiency action, the U.S. Tax Court will file a lawsuit to contest what they see as a deficiency. In other words, they believe that you have not paid the total amount you are supposed to pay, so they’re bringing up a suit to settle the matter.

Refund Action: A refund action is a little different. In a typical refund action, the taxpayer brings up the suit. These are commonly brought up when a taxpayer believes that they have overpaid their taxes and wants a refund.

Civil tax controversies that don’t fall under these actions tend not to go to trial. Instead, they are handled between the Internal Revenue Service and the taxpayer themselves, without court. It’s important to remember, though, that a civil tax controversy is a serious thing to deal with, whether or not you’re going to court over it. No matter what your specific situation is, you should seek out the services of a competent civil tax attorney.

What Type of Lawyer Handles Civil Tax Controversies and Trials?

The sad reality is that not all attorneys represent all aspects of law or even tax law. Along with that, some attorneys and firms will have far more experience and skill than others. When you consider the fact that an adverse finding or ruling could result in the forfeiture of assets and financial strain, not to mention the stress of being under investigation by the Internal Revenue Service, it’s clear that you should seek out the best legal counsel possible.

Civil tax law is complicated, but the important thing here is that you’re not handling this alone. While we’ve covered the basics of civil tax controversies and trials, the point is that your tax attorney will be able to cover the ins and outs of your specific case so that you can rest easy and not be forced to represent yourself. You must pick the right civil tax attorney for the job.

Ask Norman Spencer Law Group About Civil Tax Controversies and Trials

With so many civil tax attorneys and firms out there, some of them with high ratings and good reviews, it can be tough to find the one that can help with your case. You need a firm that has decades of experience handling tax controversies like yours and experience with handling the Internal Revenue Service. A firm like the Norman Spencer Law Group.

If you’re facing an investigation by the IRS or even if your case has progressed further and is facing trial, we’re here to help. Feel free to reach out with the particulars of your situation, and someone from our dedicated team will get back to you as soon as possible to help you out.

Securities Fraud and Alternative Data Enforcement

Criminal Defense

Recent enforcement actions by the SEC, or U.S. Securities and Exchange Commission, have spotlighted things like crypto and other alternative data. In 2021 alone, the SEC reported a 7% increase in enforcement actions, totaling $1 billion in awards. Along with that, there’s been a massive explosion in the alternative data industry. In 2020, the industry was valued at $1.72 billion and may climb to a shocking $70 billion by 2028. With these kinds of seismic shifts in the industry, it’s no wonder that there’s been a noticeable impact on securities fraud and alternative data enforcement.

Crypto Regulation

With the recent public interest in cryptocurrency, blockchain technology, and NFTs, the SEC has adjusted its enforcement strategies. These new technologies are prone to scams, fraud, and other types of misconduct. In just one recent high-profile case, scammers stole more than $1.7 million in NFTs in an apparent phishing attack.

Another way that crypto has been on the radar of the SEC is in Ponzi schemes. Investment scams are nothing new and have been going on for years. It’s common for scam artists to lure investors into investing their money with “little to no risk,” only for that money to be diverted into the scammer’s account. What’s new here is crypto and other virtual currency.

Securities Fraud and Alternative Data Excitement is Exploited

For many new investors, cryptocurrency can seem like an exciting new prospect. It’s that same excitement that is then used by fraudsters to encourage investors to put money in before the window of opportunity closes. Those who would not fall for a traditional Ponzi scheme might still be at risk of being victimized in a crypto Ponzi scheme. Investors are less skeptical of an opportunity when it involves something new or cutting-edge.

In one recent case, the organizer of a Ponzi scheme advertised a “Bitcoin investment opportunity” in an online forum. Investors were promised that they would receive up to 7% interest per week and that their investments would be used to generate returns. Instead, Bitcoins invested were used to pay investors and exchanged into dollars to pay the organizer’s expenses.

What is Alternative Data?

Alternative data is becoming increasingly popular in investment decision-making. Simply put, this is when a company incorporates large volumes of data that are found outside their public filings. This has been expected as data itself has only increased in availability. Typically, data analysts working on investment funds will pull from a variety of data sources. This could range from data on commercial transactions to information about human behavior, and all used to inform investment decisions in trading securities.

Along with crypto Ponzi schemes and related enforcement actions, there’s been an uptick in SEC interest regarding alternative data. The SEC had shown interest in alternative data before, but it wasn’t until very recently that it had taken its first enforcement action in that field.

Securities Fraud and Alternative Data Issues

The use of alternative data itself isn’t illegal, but it’s become quite common for it to be used during the commission of other crimes. It often occurs when companies and executives misrepresent their data sources. Another similar issue comes when executives misrepresent how data is collected or how that data is provided to subscribers.

Along with misrepresentations with alternative data and fraud schemes with crypto, the SEC has several other charges it prosecutes, including:

Filing False Quarterly Or Annual Reports
Investment Advisor Misconduct
Insider Trading
Improper Investments
Misrepresentation To Investors
Stock Embezzlement
Manipulations With Stock Options To Executives
Making False Promises Of Exaggerated Returns On Investments
Inappropriate Use Of Offshore Accounts
Making False Press Releases
Inflating Reported Assets

As you might expect, this list is by no means exhaustive but instead represents some of the most common charges the SEC tends to pursue.

What Could Happen if I’m Faced With Charges?

Long-term consequences include fines or jail time for a securities fraud conviction. There are also some more immediate effects as well. You could face severe monetary penalties and fines, injunctive relief, and the confiscation of any illegal funds. You could also be prohibited from serving as an officer in a public company. These consequences by themselves can be severe, and that’s before considering the prison sentencing that could come along with that.

The sobering fact here is that there are no limits to who can be tried and convicted of securities fraud. There are some common categories of people who will tend to be charged. Some of those individuals include executives accused of insider trading, investment brokers who are being investigated for misrepresenting financial products, executives suspected of making false accounting entries, and people who give some type of investment advice or sell securities without a license.

Most Investigations Aren’t Criminal at First

The critical thing to keep in mind is that most SEC investigations are not criminal from the outset, and they often begin as civil cases that then progress as evidence is collected. Another essential thing to note is that the SEC isn’t the only body investigating or enforcing these charges. It’s common for the SEC to pass cases to the Department of Justice, so defendants must get the proper legal representation to help with their issues.

Guidance on Securities Fraud and Alternative Data

With decades of combined experience in the field of securities fraud and enforcement, the Norman Spencer Law Group is just the legal firm for you. No issue is too big or small for us, too complex or straightforward. We’re available whenever and wherever we’re needed, and our dedicated and skilled team is just a click or call away.

5 Ways a Transactional Tax Planner Can Help You

Criminal Defense

According to a CNBC and Acorns Invest in You Savings Survey, 75% of Americans manage their savings without any help from a professional. With debt increasing and living expenses rising, it’s never been more critical for the average person to set realistic financial goals and stick to them. On top of this, financial literacy cost Americans nearly $1,400 in 2021 alone, making help from an investment professional paramount. But where to start if you’ve never worked with a transactional tax planner? The problem isn’t that there isn’t enough information – in fact, there’s an abundance of it. Instead, you need to cut through the noise and find the best solution for your family or business. Here are five ways a transactional tax planner can help you and why you need one.

What is a Transactional Tax Planner?

A transactional tax planner is someone who counsels clients on their wealth management needs and adds value while minimizing their financial risk. A transactional tax planner might outline a plan or plans for you to follow, or they might recommend that you go with specific products and investment vehicles.

You might turn to a transactional tax planner if you’re looking to put together a retirement savings plan, or you might reach out to one for an answer to a question about life insurance or business tax. Considering how broad the job can be, let’s look at five specific things that a transactional tax planner does.

#1 They Work With You to Assess Your Goals

No matter which direction you’re looking to go with your money, an excellent transactional tax planner will start by assessing your current financial situation and talking with you about your future goals and tax burdens. By setting up this framework at the start, your advisor will start tailoring the approach to fit you.

#2 Creating a Customized Plan

According to a recent report from the Stanford Center on Longevity, people are saving about half of what they should be for retirement. Whether you’re looking to save for retirement or optimize your tax benefits, a professional transactional tax planner will have the tools, skills, and experience needed to help you achieve your financial goals.

#3 They Advise You When Unexpected Events Occur

It’s impossible to predict where life will take you next or what unexpected changes and expenses might appear. Here are just a few situations a professional could help you through:

Inherited money and are looking for investment advice and planning
Have recently gotten divorced and need to adjust your finances
Want to help your parents with their finances as they reach their twilight years.

A transactional tax planner will help you through any life transitions for you or your business.

#4 Accurately Setup and Monitor Accounts

If the thought of manually setting up a brokerage account and figuring out how to invest your money has you breaking out in a sweat, it might be time to start a conversation with a transactional tax planner. Beyond assessing your goals, developing a plan, and advising you in hard times, they’ll also be able to do the heavy-lifting when it comes to managing your money. They’ll do this, too, while ensuring that your tax burden is minimal.

#5 Keep an Eye Out for Opportunities

Chances are you don’t know the ins and outs of insurance policies and mortgages, and that’s okay. A professional will and they’ll be able to find investment vehicles that make sense given the unique goals of you or your business.

Why Do You Need a Transactional Tax Planner?

Even though three-quarters of Americans manage their savings, their interest in professional help is straightforward. As an example, according to Google, mobile searches for “financial advisors” grew by 75% in the space of two years. Let’s look at some tangible reasons to hire a transactional tax planner.

The way that most people find their way into the office of a transactional tax planner comes down to a lack of time. Many wonder whether they should use a transactional tax planner or handle things independently, but a busy schedule quickly answers the question for them. Managing your money and taxes isn’t an easy thing to do, and it can be challenging to devote the kind of time it takes to do this right.

As you grow older, gain more wealth, and experience life changes, your priorities will adjust accordingly. Maybe you’re looking to combine finances with your partner after getting married, or perhaps you’re due to have a baby soon and need to work on your budget before the little one arrives. You could even be looking to incorporate your first business. Whatever it is, the right advisor will have years (if not decades) of experience handling situations just like these.

We Assist with Transactional Tax Planning

At Norman Spencer Law Group, our team is committed to advancing transactions that meet your objectives. We collaborate with internal tax and accounting departments and outside firms to design a plan that will yield optimal after-tax results. At the Norman Spencer Law Group, our transactional tax planning attorneys deliver valuable tax and business services covering the full spectrum of laws. We collaborate with your advisors and affiliates, including any underwriters, accountants, lenders, investors, and financial advisors. We have the expertise to provide concrete, tangible solutions that will work for you.

Can Defendants Get Access to Grand Jury Materials?

Criminal Defense, Uncategorized

Individuals targeted by federal grand jury inquires often ask this question. Do they have the right to have access to materials submitted to the grand jury? Criminal suspects have four options for obtaining grand jury materials disclosure. Criminal Federal Attorneys at Norman Spencer represent clients at all stages of the federal criminal process, from grand jury investigations to trials.

First, a defendant is entitled to transcripts of his or her own evidence under Rule 16 of the Federal Rules of Criminal Procedure. Second, a defendant is entitled to transcripts of prosecution witnesses who testify at trial under the Jencks Act. Third, they can get the information if they show a basis for dismissing the indictment because of a matter that happened before the grand jury. Finally, a defendant can request disclosure which allows a court to order grand jury matters to be disclosed “preliminarily to or in connection with a judicial proceeding.”

Defendants Rights to Grand Jury Materials

By far, the Jencks Act clause, which is the second of these, is the most contentious. Defendants are entitled to the pretrial “statements” of prosecution witnesses who testify at trial under the Jencks Act. Grand jury testimony, on the other hand, was not included in the scope of claims when it was first enacted. As a result, defendants were required to obtain transparency by other means. The defendants in Dennis v. the United States requested that the grand jury testimony of four witnesses be made public as each completed a direct investigation. The trial court dismissed each motion on the grounds that the defendants had not shown a specific need because the transcripts were unlikely to contain “‘anything of impeachable significance’ “. The sentences were overturned by the Supreme Court. The court reaffirmed the value of grand jury confidentiality as well as the requirement that any litigant, including criminal defendants, must show specific needs.

However, the Court went on to say that in this situation, such a need had been shown. First, the court considered a number of factors that, while not exclusive to criminal proceedings, all led to disclosure. The “growing realization that disclosure, rather than suppression, of relevant materials, ordinarily promotes the proper administration of criminal justice,” particularly where “the value of maintaining the confidentiality of the grand jury minutes is minimal” because the grand jury investigation has concluded. Finally, the court stated that granting government access to the transcript as a matter of nature while denying all access to criminal defendants is fundamentally unfair: “It is scarcely justifiable for the prosecution to have exclusive access to a storehouse of relevant facts in our adversary framework for deciding guilt or innocence.

Using Discretion with Disclosure

Aside from these broad factors, the court found that there were some circumstances in the case that warranted disclosure. For example, the testimony in question was given fifteen years prior to the current trial; the testimony of the four witnesses was the heart of the government’s case; all of the testimony was uncorroborated; one witness was an alleged accomplice and another a paid government informer; and finally, one of the witnesses testified that he had been mistaken about certain dates in a previous statement; and finally, one of the witnesses testified that he had been mistaken about certain dates in a prior statement. With all of these considerations in favor of transparency and no need for continued confidentiality, the court determined that the trial court’s denial of disclosure was an abuse of discretion. The court then turned to the question of the district court’s authority over the transcript to be published.

Despite allowing the trial court to redact extraneous material and issue protective orders, the court dismissed the idea that a judge might examine the transcripts in-camera, decide if they contained something beneficial to the defense, and refuse disclosure except though a specific need had been shown. It is necessary to note, however, that the prosecution is not obligated to turn over Jencks Act information to the defendant until the direct questioning of the witness is completed; the Act does not cover the disclosure of any other material at any other time.

Discuss Your Rights to View Grand Jury Materials

On a showing that grounds exist to dismiss the indictment because of a matter before the grand jury, a court may order disclosure of grand jury information to the defendant under Rule 6. However, the Supreme Court’s narrowing of the grounds for obtaining dismissal of indictments in Costello v. United States and the cases after it has severely limited the use of this clause. In essence, these cases hold that an indictment cannot be dismissed based on the amount or nature of the evidence submitted to the grand jury. Instead, these motions must cover any part of the grand jury procedure that can still be used to dismiss an indictment. In addition, defendants requiring disclosure under Rule 6(e)(3)(C)(ii) have traditionally been needed to show a specific need. As a result, general claims that the transcripts are needed to prepare a motion to dismiss, or to include proof of prosecutorial wrongdoing, or conclusory charges of misconduct, are inadequate to allow disclosure.
If you have been charged with a federal crime, call our federal criminal attorneys at Norman Spencer Law Group today to discuss your case.

Norman Spencer Law Group

Civil Tax Controversies and Trials FAQs

What is a Civil Tax Controversy?

Is There Another Type of Tax Controversy?

How Might Civil Tax Controversy and Trials Occur?

What if I Filed My Taxes With a Service That Has Audit Protection?

Will This Go to Court?

What Type of Lawyer Handles Civil Tax Controversies and Trials?

Ask Norman Spencer Law Group About Civil Tax Controversies and Trials

Securities Fraud and Alternative Data Enforcement

Crypto Regulation

Securities Fraud and Alternative Data Excitement is Exploited

What is Alternative Data?

Securities Fraud and Alternative Data Issues

What Could Happen if I’m Faced With Charges?

Most Investigations Aren’t Criminal at First

Guidance on Securities Fraud and Alternative Data

5 Ways a Transactional Tax Planner Can Help You

What is a Transactional Tax Planner?

#1 They Work With You to Assess Your Goals

#2 Creating a Customized Plan

#3 They Advise You When Unexpected Events Occur

#4 Accurately Setup and Monitor Accounts

#5 Keep an Eye Out for Opportunities

Why Do You Need a Transactional Tax Planner?

We Assist with Transactional Tax Planning

Can Defendants Get Access to Grand Jury Materials?

Defendants Rights to Grand Jury Materials

Using Discretion with Disclosure

Discuss Your Rights to View Grand Jury Materials

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