The IRS is Effectively the Largest Collection Agency in the Country

You may have been there, you are diligent about filing your taxes, and you find yourself in an uncomfortable situation that requires you to pay in considerably or pay fines due to inadvertently miscalculating your taxes.

When dealing with the IRS, you are essentially dealing with the most extensive collection agency in the country and one with extreme power. The IRS can garnish your wages, seek liens on property, add on fines or other penalties, and more if they feel you have intentionally or unintentionally miscalculated taxes owed.

Can I Sue the IRS?

Due to sovereign immunity, the IRS can’t be sued for pain, suffering, or emotional distress. Sovereign immunity, by definition, refers to the fact that the government cannot be sued without its consent.

In some cases, you may attempt to pursue damages due to the distress that the IRS caused you when trying to collect taxes owed. For example, if you file for bankruptcy and the IRS continues to pursue you for taxes owed, bankruptcy is supposed to halt these actions, and you may feel that you have a right to seek additional damages for the pain and suffering caused. Generally speaking, these cases aren’t likely to be successful due to sovereign immunity.

When is it Appropriate to Sue the IRS?

If the IRS is behaving in a manner that isn’t aligned with the laws that are in place to protect you from pursuing debts owed, you may have a case against them. Actions such as unauthorized collection can result in pursuing a claim against the IRS. An example may be if the IRS disregards laws on how to pursue debts. This can be grounds for a lawsuit.

IRS regulations are in place and must be strictly followed when pursuing tax debt. If it is found that an IRS agent intentionally, recklessly, or negligently disregarded these regulations, you may have a case against them. You may be able to recover damages totaling up to one million dollars and the costs of legal representation to pursue the damages.

Though these cases are challenging to take on, they aren’t impossible. If it is proven that reckless or intentional misconduct was involved, you may have a solid case to work with your lawyer.

What if I am Denied a Tax Refund?

First, you must exhaust administrative options to pursue your refined. Administrative functions can include contacting the IRS via calls or letters and good faith attempts to rectify the situation.

For example, if you are denied a refund due to your errors in filing. If you have attempted to appeal the issue, you may find this information and have other options for recourse. If you fail to do this and try to pursue a case against the IRS, your claim will likely be denied if you haven’t followed through with reasonable attempts to rectify the situation before filing suit.

If you have followed appropriate actions with the help of your CPA or a tax attorney and found that the IRS still is refusing your refund, you may have grounds for a case.

It is important to note that the statute of limitations on these cases is typically short. You should consult an attorney immediately to ensure you are within the statute of constraints to handle the case.

What if My Wages Were Improperly Garnished?

If you have a common name, you may be a victim of the IRS improperly garnishing your wages to recover taxes from another party with a similar name.

Due to the IRS not exercising their due diligence by confirming that you are not the guilty party and negligently garnishing your wages regardless, you may have a case against them.

In a typical wage garnishment case, the IRS will send multiple notifications to you, your employer, and in some cases, your bank to let them know of their intentions. If you check your balance one day, and determine that wages were wrongfully garnished without notice, you may have a necessary case against the IRS.

What Damages Can I Pursue?

Should you have a strong case against the IRS and attempt to pursue damages, you may be entitled to a few different examples of damages. First, you may be entitled to the economic damages that you faced. In the example above, with a wage garnishment, you would be able to pursue the recovery of the wages garnished.

The cost of your attorney or court costs may also be eligible items for you to recover. Attorney’s fees can add up quickly, although worth it to adequately protect yourself. Recovering these and any court costs you are subject to may decide to pursue the IRS a more comfortable one.

If the IRS is found to violate IRS regulations, you may receive a penalty concerning each offense that is proven. For example, if wages were improperly garnished, a fine may be imposed on the IRS for the violation. There may also be fines imposed for wrongful collection actions, reckless collection, or unauthorized disclosures.

Going up against the IRS may feel overwhelming, so people hesitate to take them on. With the correct information and an experienced tax lawyer, you can protect yourself against unlawful or negligent actions by the IRS and obtain damages where applicable.

Contact our office at (786) 522-0410 to learn how we may be able to assist you in recovering damages from the IRS. We have years of experience fighting tirelessly for our clients, and we look forward to helping you, too.