Tax Attorney in Alabama

Yes. Alabama imposes a graduated personal income tax with brackets of 2%, 4%, and 5% under Ala. Code Title 40, Chapter 18. For single filers, the 5% top bracket begins at $3,000 of taxable income; for joint filers, it begins at $6,000. Because the brackets are so compressed, the practical effect for most working households is a flat 5% rate on the bulk of their income. Federal income tax on Form 1040 with the IRS applies separately and in addition. Alabama does not impose a local-option city or county income tax.

The U.S. Tax Court designates Birmingham and Mobile as the Alabama places of trial. Neither has a permanent courtroom; the specific session address is published with each notice of trial. A petitioner designates the preferred place of trial under Tax Court Rule 140; cases from Montgomery, Huntsville, Tuscaloosa, Dothan, and the rest of the state route to one of those two cities depending on geography and the Court's calendar. The Tax Court travels a limited circuit, and Alabama petitioners should account for the possibility of in-person trial dates in either Birmingham or Mobile when calendaring.

Under Ala. Code §40-2A-7, the Department of Revenue generally has three years from the date the return was due or filed (whichever is later) to issue a preliminary assessment. Fraud, false returns, and unfiled returns leave the assessment period open indefinitely. Once a final assessment is entered, the Department generally has ten years from the date the assessment becomes final to collect, paralleling but running independently of the federal IRC §6502 Collection Statute Expiration Date. Sales-and-use tax follows the same three-year assessment window under Ala. Code §40-2A-7(b)(2).

Yes. The IRS examines federal income, employment, and excise tax. The Alabama Department of Revenue examines state personal income tax, the 6.5% Corporate Income Tax, the Business Privilege Tax, and state sales-and-use tax. An Alabama resident or business can simultaneously face a federal IRS exam and a state audit. The two agencies share information through the federal-state information-exchange program, and a federal adjustment is reportable to Alabama within a fixed window after the federal determination becomes final under Ala. Code §40-18-43. Self-administered cities and counties with their own sales-tax audit authority can also pull data once a federal exam closes.

Yes. The Alabama Department of Revenue accepts Offers in Compromise under Ala. Code §40-2A-18. The state OIC is available where doubt as to liability exists, doubt as to collectibility exists, or where collection in full would create economic hardship — tracking the three IRC §7122 grounds. The application is the Department's Form CP:OIC with supporting financial disclosure. Acceptance is discretionary with the Commissioner of Revenue. The federal IRS OIC remains the principal mechanism for resolving a federal balance, and the state OIC is most often used to mop up the parallel state liability after a federal acceptance.

Your CSED is calculated from the date of assessment, which appears on your IRS Account Transcript as Transaction Code 150 (return filed) or Transaction Code 290 (additional assessment). Add ten years, then add the days for any tolling events: pending OICs, CDP hearings, bankruptcy stays, and so on. The IRS publishes the CSED internally on its CC ACTRA transcript; we pull this for clients as part of every engagement. A debt assessed in 2016 may be approaching expiration in 2026, and aggressive collection enforcement near the CSED is common.

Probably yes for the federal trust-fund portion. IRC §6672 assesses a Trust Fund Recovery Penalty against any "responsible person" who "willfully" failed to pay over withheld taxes — the FICA and federal income-tax withholding portion of Form 941, not the employer's share. The IRS conducts a Form 4180 interview to identify responsible persons. Anyone with check-signing authority, payroll-decision authority, or knowledge of the unpaid taxes can be assessed. On the Alabama side, unpaid state withholding under Ala. Code §40-29-72 carries similar personal-responsibility exposure for officers, members, and managers. Auto-supplier closures around Tuscaloosa, Lincoln, Huntsville, and Montgomery, plus poultry-processor downsizing in north Alabama, produce a recurring stream of TFRP cases.

Yes. IRC §7345 authorizes the IRS to certify "seriously delinquent" tax debt — $62,000 for 2026, indexed for inflation — to the State Department, which may then deny passport renewal or revoke an active passport. The certification reverses when the debt is paid, an IA is in place, an accepted OIC is in force, an active CDP hearing is pending, or Innocent Spouse Relief is in process. Alabama executives at Mercedes-Benz Tuscaloosa, Honda Lincoln, Toyota Huntsville, and Hyundai Montgomery who rotate to international assignments, plus Redstone Arsenal contractors with overseas travel, face material exposure. Decertification can be processed in 30 days or less in many cases.

Alabama imposes a 4% state sales tax under Ala. Code §40-23-2, but cities and counties layer their own sales-tax surcharges on top. Combined rates in Birmingham, Montgomery, and Mobile commonly exceed 10%; portions of Jefferson County and the City of Hoover have run at or near the highest combined rates in the nation in recent surveys. Many Alabama municipalities self-administer their local sales tax, meaning a vendor may file with the state for the state portion and separately with the city or county for the local portion. Personal liability for unpaid Alabama sales tax under Ala. Code §40-29-72 attaches to officers and members in a manner that parallels the federal Trust Fund Recovery Penalty under IRC §6672.

The Business Privilege Tax is a separate Alabama tax assessed annually on the privilege of doing business in the state, codified at Ala. Code Title 40, Chapter 14A. The tax applies to corporations, limited liability companies, limited partnerships, and most other entities organized under Alabama law or qualified to do business in Alabama. The amount ranges from a $50 minimum to a $15,000 maximum, calculated on the entity's net worth apportioned to Alabama. The Business Privilege Tax accrues every year the entity remains in legal existence — it does not stop simply because operations have ceased. We routinely uncover six or seven years of unpaid Business Privilege Tax when winding down inactive Alabama entities, often paired with unfiled federal returns. Filing for formal dissolution with the Alabama Secretary of State, plus a final BPT return, is what stops the meter.

The Alabama Tax Tribunal is an independent state agency established by Act 2014-146 effective October 1, 2014, that functions as Alabama's tax court. It hears appeals from final assessments issued by the Department of Revenue and from certain actions of self-administered counties and municipalities — including state income tax, the Corporate Income Tax, the Business Privilege Tax, sales-and-use tax, and local sales-tax matters that fall within its delegated jurisdiction. Appeals from Tribunal decisions go to the Alabama Court of Civil Appeals under Ala. Code §40-2B-2. The Tribunal does not hear federal IRS matters — those go to the U.S. Tax Court. The Tribunal replaced the Department of Revenue's prior Administrative Law Division, which was abolished when the Tribunal was created.

Federal tax-resolution fees vary by matter complexity. A straightforward Installment Agreement typically falls between $1,500 and $3,500. A full Offer in Compromise with Form 433 financial analysis runs $4,000 to $7,500. Audit defense depends on the audit type and the number of issues. A U.S. Tax Court petition with case workup and trial preparation generally starts at $6,000 and rises with complexity. VTL provides a written fee quote after the free consultation. Cal Bar Rule 7.1 prohibits comparisons claiming we are cheaper or faster than competitors without verifiable substantiation, so we do not market on price.

Yes. Communications between you and a licensed attorney for the purpose of seeking legal advice are protected by federal common-law attorney-client privilege, subject to the usual exceptions (crime-fraud, waiver, etc.). The narrower federally-authorized tax practitioner privilege under IRC §7525 applies to non-attorney CPAs and EAs but does not extend to criminal-tax matters. An attorney handling your tax case retains the broader privilege that survives criminal investigation.

A Tax Court trial is a bench trial — no jury — before a Judge or Special Trial Judge of the U.S. Tax Court. In Birmingham and Mobile, sessions use rented federal facilities; the specific room is published with the notice of trial. The session opens with calendar call, where the Court hears scheduling matters. Most cases on the calendar settle before trial; the IRS Office of Chief Counsel attorney meets with petitioner's counsel during the days before trial. If trial proceeds, the petitioner bears the burden of proof on most issues, presents evidence and witness testimony, and the Court issues a written opinion within several months. Small-tax-case procedure under IRC §7463 applies to deficiencies of $50,000 or less per year and uses a simplified evidentiary standard.

Yes, generally. IRC §6331(k)(1) suspends levy action while an offer is pending and for 30 days after a rejection, and during any timely-filed Appeals review of a rejection. The IRS will not levy on you while a processable OIC is being evaluated. However, the IRS may still file a Notice of Federal Tax Lien during the OIC pendency to protect its position. CSED is also tolled during the pendency. A poorly-prepared OIC that gets returned (not rejected) does not provide the same protection — processability matters.

For the Alabama Tax Tribunal, taxpayers may represent themselves, be represented by an Alabama-licensed attorney, or in many matters by a CPA or other qualified representative under Tribunal rules. Appeals from the Tribunal to the Alabama Court of Civil Appeals generally require an attorney admitted to the Alabama Bar. VTL handles the federal side of any overlapping matter and coordinates with Alabama counsel where Tribunal litigation or state-court appeal is necessary. Many Alabama Department of Revenue matters resolve at the administrative-review stage without ever reaching the Tribunal, and many of those resolutions are driven by what is happening in the parallel federal IRS case.