Tax Insights
Analysis and practical guides on tax.
9 articles, checklists, and guides on tax law, written by the attorneys at MC Law. Every piece is general information, not legal advice—for a specific matter, contact the firm.
State and Local Tax for Multistate Businesses: Nexus, Apportionment, and Combined Reporting
Multistate tax exposure accumulates invisibly. A company hires a remote employee, stores inventory in a fulfillment warehouse, or crosses a sales threshold in a state it has never visited, and acquires filing obligations nobody noticed until an audit or a diligence request surfaces them. The framework has three moving parts: nexus, which decides whether a state may tax at all; apportionment, which decides how much of the company's income that state may reach; and the reporting method, which decides whose income is counted. Each has shifted substantially in the last decade—economic nexus for sales tax after Wayfair, a narrowing interpretation of the federal protection for solicitation-only activity, and a broad move toward single sales factor apportionment with market-based sourcing. This article explains each part and the practical work of finding and fixing exposure.
Claiming the Research and Development Tax Credit
The research credit rewards activity that most companies are already doing and do not think of as research: developing a product, improving a process, writing software, or engineering a solution where the outcome was uncertain at the outset. Eligibility turns on a four-part test applied to each business component, and the credit is computed on a narrow set of expenses—wages for qualified services, supplies consumed in the process, and a fraction of contract research payments. The credit is also among the most heavily examined positions on a return, and the difference between a defensible claim and a disallowed one is almost entirely documentation created while the work happened. This guide covers eligibility, the expense categories, the two computation methods, the payroll tax offset available to small companies, the filing and refund claim requirements, and how to survive an examination.
Tax Problem Resolution Checklist
A working checklist for a tax debt, sequenced from the emergency to the resolution. It opens with the deadlines that must be calendared the day a notice arrives and the immediate steps for a levy in progress. It covers pulling and reading all four transcript types, identifying unfiled years and substitute returns, reconstructing records, and computing reasonable collection potential before anyone quotes a fee. It includes the financial statement documentation list with the expense categories most often under-claimed, the four resolution paths with the facts that point to each, penalty abatement and innocent spouse requests, lien withdrawal and discharge, and the free representation most people do not know exists.
Tax Controversy Toolkit: Hearing Requests, Financial Statements, and Relief Applications
Working templates for a tax collection case. It includes a notice triage worksheet that converts an envelope into a deadline, a transcript request and collection statute worksheet, an emergency levy release request, and a collection due process statement that actually raises the issues Appeals can act on. It provides a record reconstruction log for filing old returns, a reasonable collection potential worksheet you can complete before anyone quotes a fee, and an allowable expense worksheet with the categories most often under-claimed. It closes with penalty abatement and reasonable cause letters, an innocent spouse declaration outline, lien withdrawal and discharge requests, and a Taxpayer Advocate hardship request.
Resolving a Tax Debt with the IRS: A Practical Guide
This guide walks through resolving a tax debt in the order the work actually happens: stop the bleeding, pull the transcripts, get compliant on filing, compute the numbers, then choose the resolution that fits. It explains how to read an account transcript for the collection statute expiration date, how to reconstruct records for years you no longer have, and how to compute your own reasonable collection potential before anyone quotes you a fee. It covers emergency levy releases, the thirty-day hearing deadline, the four resolution paths and how to choose between them, penalty abatement requests that are granted for the asking, and the free representation available to people who assume they cannot afford help.
Personal Income Tax Problems: Unfiled Returns, Liens, Levies, and Offers in Compromise
Almost every tax problem is a collection problem, and almost every collection problem has a procedural answer that most people never learn about. This article explains what actually happens when returns go unfiled, how a substitute return inflates a balance and why filing a real one usually reduces it, and what a federal tax lien does that is different from a levy. It walks through the two hearing rights that stop collection while a case is reviewed, the four ways to resolve a balance you cannot pay in full, and the penalty relief that is granted for the asking far more often than people expect. It covers innocent spouse relief, the deadlines that quietly end both refunds and collection, and where to get free help that is genuinely good.
IRS Tax Controversy: Audits, Appeals, Collection Due Process, and the Tax Court
A federal tax dispute moves through a defined sequence of stages, and the options available to a taxpayer narrow at each one. Examination produces a proposed adjustment, an administrative appeal offers the only forum authorized to settle on litigation risk rather than the merits alone, and a statutory notice of deficiency opens a ninety-day window that is the last chance to litigate without first paying the tax. Collection is a parallel track with its own due process protections, its own deadlines, and its own set of resolution alternatives. This article maps the stages, explains what each forum can and cannot do, and covers the penalty defenses, relief provisions, and limitations rules that determine outcomes more often than the substantive tax law does.
Responding to an IRS Notice of Deficiency
A statutory notice of deficiency gives the taxpayer ninety days to file a petition in the United States Tax Court, and it is the last opportunity to litigate a proposed tax without first paying it. The deadline is short, the consequences of missing it are severe but not always fatal, and the decision it forces—which forum, and on what theory—shapes everything that follows. Before responding, counsel must verify that the notice is valid, calculate the deadline precisely, and determine whether the underlying case was ever heard by the IRS Independent Office of Appeals, which remains the only administrative body authorized to settle on litigation risk. This guide covers verifying the notice, computing the deadline, choosing a forum, drafting and filing the petition, the path through docketed Appeals, and the alternatives available to a taxpayer who let the ninety days run.
Payroll Taxes and the Trust Fund Recovery Penalty: Personal Liability for Business Owners
Payroll taxes occupy a category of their own because part of the money never belonged to the employer. Amounts withheld from an employee's wages are held in trust for the United States, and a business that spends them has used government money to pay its own creditors—which is why the collection tools are severe and why liability reaches individuals personally through a penalty equal to the entire unpaid trust fund amount. The two elements that determine personal exposure, responsibility and willfulness, are broader than nearly anyone expects, and they reach bookkeepers, minority owners, and outside directors who never thought of themselves as decision-makers. This article covers the deposit and reporting system, how the penalty is assessed and defended, the classification and outsourcing questions that create the underlying liability, and the resolution paths available once an assessment exists.