The Law Offices of Matthew W. Stanley

Law Firm Overview

Possesses an "AV" rating, the top ranking in the Martindale-Hubbell Law Directory

The "A" signifies the highest level of legal ability, while the "V" represents a "very high" adherence to the "Professional Code of Responsibility" requirements of good conduct, reliability, ethics and diligence. Martindale-Hubbell awards the rating based on confidential opinions submitted by other lawyers and judges.
 
Areas of Multistate Practice

State and federal taxes
Representation before the IRS and various state tax agencies
Tax controversies

Civil and criminal proceedings

Criminal tax
Tax Litigation/trials

State courts

Washington - Board of Tax Appeals, Thurston County Superior Court
Oregon, California, Idaho, Arizona

Federal district courts
US Tax Court
US Court of Federal Claims

Administrative law

e.g. Dept. of Labor and Industries; Dept of Employment Security; Dept. of Licensing

Lawyer Overview

Mr. Stanley spent his formative years as an attorney with the federal government. For over seven years, he served as a Senior Trial Attorney with Chief Counsel's Office of the Internal Revenue Service and a Special Designated Assistant US Attorney - Tax. In those capacities, he regularly litigated cases pending before the US Tax Court in Chief Counsel's Midwest and Western Regions. He also assisted the Dept. of Justice and local US Attorney's offices with general litigation and criminal tax cases. He has been in private practice since 1982.

The federal taxes most commonly subject to audits and subsequent procedures are income tax and employment/payroll taxes. The various states call their taxes by different names, and the tax systems vary. The State of Washington does not have an income tax. It applies its B&O tax (business and occupation tax) and sales and use taxes generally against gross earnings or other gross business/sales receipts, and deductions are rare. By comparison, the States of Oregon and California adhere more to the federal system under which as a general matter, taxes are applied to net income or receipts after allowing for certain deductions and credits.

While types and names of taxes are different in different places, the processes by which underreported and underpaid taxes are identified and collected are reasonably consistent and follow certain steps:

Tax Audits

The two basic types of taxpayers are those who have filed correct returns and those who have not. Those that have filed correct returns should seek an agreement with the revenue agent or other auditor regarding how, when and to what extent the audit will be conducted. Both taxpayers and the tax agency benefit if an audit proceeds smoothly and in a timely manner.

Seriously incorrect returns may be the subject of "egg shell" audits and could lead to criminal charges. Unless accountant - client communications are privileged in your state, contact an attorney before speaking with anyone.

Criminal tax investigations

If a civil audit begins, but is interrupted or delayed without explanation, it may be that the auditor is consulting with the agency's criminal investigation office. It is important to know that many successful criminal cases are based on damaging information that the taxpayer provides after concluding that maybe the authorities will go easy on him if he's "nice" and cooperative. That strategy does not work.

Summonses and subpoenas

All tax agencies have the legal authority to issue summonses requiring a taxpayer to appear at an appointed place and time, and produce records and testify. A variety of potential Constitutional and other defenses to these involuntary procedures may exist.

Voluntary disclosure

Both the IRS and Washington's Department of Revenue have voluntary disclosure policies under which taxpayers who have made "mistakes" may disclose them to the authorities. The policies work best if the disclosure predates contact from the agencies and can benefit the taxpayer by reducing penalties, limiting the tax periods subject to audit and in serious cases avoiding criminal prosecution.

"Trust fund" assessments

Businesses collect withholding and social security payments from their employees, as well as sales taxes from customers. These collected taxes do not belong to the business, but rather are held in trust as "trust funds" until paid over to the IRS or the State. If the business entity does not pay them, both the State and the IRS have statutory authority to assess and collect those amounts from responsible persons such as the owners and officers.

Administrative appeal

The IRS and Washington's Department of Revenue offer administrative appeal remedies to taxpayers who do not agree with the outcome of their audit. Both agencies maintain Appeals offices whose basic function is to review the correctness of the audit results and, if appropriate, resolve the case by settlement or otherwise to avoid later formal proceedings and litigation.

A more informal right of administrative appeal exists. During audits or perhaps other agency proceedings, taxpayers may contact managers to address pending tax issues, mistakes, discourteous conduct and other timely matters.

Tax assessments

Depending on the type of tax and the agency, "assessments" will occur at different stages of the tax determination process. Agency determinations may be appealed inside the agency, and eventually, to a court of law. An appropriate assessment is necessary before the taxpayer can take his case to court.

Refund claims

For various reasons, taxpayers may file tax refund claims with the IRS and with the various state tax agencies. Often, a taxpayer will choose to pay the tax first and file a claim in order to choose a particular court to hear his case. For one reason or another, taxpayers may be required to pay before they have the opportunity to dispute their liability for tax.

Litigation - trial of a tax case

U.S. Tax Court: Taxpayers can seek relief from this Court without having to pay the tax, penalties and interest first. No jury trials. Tax Court judges travel around the country to conduct hearings/trials. Taxpayers may file a Tax Court petition after receiving a Notice of Deficiency from the IRS. Court offers different regular case and small case procedures.

U.S. Court of Federal Claims: Must pay the tax first, then file a claim for refund. No jury trials offered. Judges will travel to hear testimony, but conducts most hearings and trials in Washington, D.C.

Federal district courts: These are located in various districts around the country, thereby offering both a local forum for tax trials and the option to request trial by jury. Must pay tax first and file refund claim.

Washington State Board of Tax Appeals: The Board conducts all hearings and offers different regular and small case procedures. Taxpayers may request to pay taxes, penalties and interest due after a Board decision, but the usual procedure is to pay the amounts due first.
Thurston County Superior Court: Taxpayers may appeal to this Court directly from a Department of Revenue assessment, or after Board of Tax Appeals consideration. Taxpayers may request trial by jury.

Settlements

Offers in Compromise: Federal tax case settlements can be pursued at almost any time. Offers in Compromise, however, are appropriate only after the taxes at issue have been assessed. Taxpayers may file three types of offers, claiming they cannot afford to pay the amounts due, that they should be given relief on equitable grounds, or that they are not liable for the tax.

The Department of Revenue and most state agencies have statutory authority to settle. The settlement ground rules are not nearly as well defined as the federal rules, as the IRS must assure uniform settlement considerations throughout the country.

Collection disputes and issues

IRS and the states devote major resources both to determine what tax is owed and to collect tax either voluntarily or involuntarily.

The collection of taxes may involve consideration of a myriad of matters, including bankruptcy, wage and property garnishments, seizures and levies, marital status, property ownership questions, the status of property as community or separate , just to name a few.

Areas of Practice

• Business & Commercial Law
• Tax Law

Honors and Awards

• AV Rated by Martindale-Hubbell
• Tax "Super Lawyer", Washington Law & Politics, 2000
• Tax "Super Lawyer", Washington Law & Politics, 2001

Classes and Seminars

• Frequent Speaker, State and Federal Tax Seminars

West Practice Categories

Business & Commercial, Tax