SOURCE: Brager Tax Law Group, A P.C.

Brager Tax Law Group, A P.C.

January 18, 2011 06:00 ET

L.A. Tax Attorney Dennis Brager Announces Big "Win" in a Case Against the IRS

Appeal Focused on Whether Workers Were Independent Contractors or Employees

LOS ANGELES, CA--(Marketwire - January 18, 2011) - Los Angeles Tax Attorney Dennis Brager announced today a victory in a three year case against the IRS represented by his firm, Brager Tax Law Group, A P.C. In an unusual turn of events, the United States Tax Court ordered the IRS to pay over $20,000 in tax lawyers fees to his client, a medical transcription company, after a six-year battle over payroll taxes. Calling it a "victory for small business," Attorney Dennis Brager of Brager Tax Law Group persuaded the IRS to concede in full its demand for over $500,000 in additional taxes plus interest. Following up on the IRS concession, the Tax Court found that the IRS position had been unreasonable. The IRS had until December 27th to appeal the decision by the Tax Court.

Mr. Brager called the finding "significant" saying it is rare that the IRS is ordered to pay attorneys fees because they are only awarded if the IRS's actions were not "substantially justified." At issue was whether the client was using independent contractors or employees to do its work. 

In 2004, a tax audit by the IRS determined that the client's transcriptionists, who worked from home, should be categorized as employees. The IRS then assessed $500,000 in additional taxes, plus interest, against the company. An appeal was made in 2006 by another tax attorney, however he failed to settle the case. The client then hired Brager Tax Law Group to litigate for them against the IRS in the U.S. Tax Court. 

From early 2007 until the end of 2010, Mr. Brager and his team of tax lawyers repeatedly responded to the IRS requests for more and more documentation. Shortly before the case was scheduled for trial, the IRS conceded its case in full admitting that the evidence presented established the client's claim. Determining whether workers are independent contractors or employees continues to be a "hot button" issue for the IRS.

"The IRS agreed to our client's original position," said Mr. Brager, "that these workers were independent contractors not employees. In our opinion, they protracted the case for years by requesting redundant evidence leading to unnecessary legal fees for our client."

Mr. Brager is a California State Bar Certified Tax Specialist and a former Senior Tax Attorney for the IRS's Office of Chief Counsel. In addition to representing the IRS in court, he has advised the Service on complex civil and criminal tax issues. His firm's practice is limited to representing clients with tax disputes with the IRS and the State of California. For more information, please visit www.bragertaxlaw.com.

Contact Information

  • Please contact:
    Dennis Brager, Esq.
    Brager Tax Law Group, A P.C.
    Telephone: (310) 208-6200
    www.bragertaxlaw.com