Tax Attorney in Tennessee

No broad personal income tax. The Hall Income Tax on interest and dividend income was phased out and fully repealed effective January 1, 2021 under Public Chapter 1108 (2016). Tennessee businesses still owe the Department of Revenue a franchise tax under Tenn. Code Ann. §67-4-2105 (currently $0.25 per $100 of net worth or real and tangible property, whichever is greater), a 6.5% excise tax on net earnings under Tenn. Code Ann. §67-4-2007, sales-and-use tax (7% state plus local-option rates between 1.5% and 2.75%), and the business tax. Federal income tax (Form 1040) applies in full to Tennessee residents.

The U.S. Tax Court holds trial sessions in Nashville at the Estes Kefauver Federal Building (801 Broadway, Room C650), Memphis at the Odell Horton Federal Building (167 N Main St, Room 1006), and Knoxville (no permanent courtroom; check the trial notice for the rented address). A petitioner designates the preferred place of trial on the petition under Tax Court Rule 140. Middle Tennessee filers (Nashville, Clarksville, Murfreesboro, Franklin, Brentwood) typically calendar to Nashville. West Tennessee (Memphis, Jackson, Bartlett) routes to Memphis. East Tennessee (Knoxville, Chattanooga, Johnson City, Kingsport) routes to Knoxville.

Under Tenn. Code Ann. §67-1-1501, the Department of Revenue generally has three years from the date a return was filed (or was due, whichever is later) to assess a deficiency. The period extends to six years for substantial understatements of 25% or more of gross income, and there is no statute of limitations where no return was filed or where fraud is shown. The federal IRS Collection Statute Expiration Date (10 years from assessment under IRC §6502) runs independently from any Tennessee state SOL.

Yes, but they audit different taxes. The IRS examines federal income tax, federal employment tax, and federal excise tax. The Tennessee Department of Revenue examines state franchise tax, excise tax, sales-and-use tax, business tax, and other state-administered taxes. A Tennessee business can simultaneously face an IRS payroll audit (Form 941 issues) and a Department of Revenue sales-tax audit. The two agencies share information through information-exchange agreements; an adjustment in one forum often triggers a look at the other.

Tennessee does not operate a formal Offer in Compromise program in the way the federal IRS does under IRC §7122. The Department of Revenue may negotiate settlements of disputed liabilities through the informal-conference process at the Hearing Office, accept installment payment arrangements, and waive penalties under Tenn. Code Ann. §67-1-803 where reasonable cause exists. For the federal side, the IRS OIC remains the standard mechanism for resolving a federal tax balance for less than the full amount when collectibility or liability is genuinely in doubt.

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 date internally on its CC ACTRA transcript; we pull this for clients as part of every engagement. The practical impact is significant — a debt assessed in 2016 may be approaching expiration in 2026, and aggressive 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 state side, Tennessee Department of Revenue can pursue responsible persons for unremitted sales-and-use tax under Tenn. Code Ann. §67-1-1438 because that tax is collected in trust from purchasers.

Yes. IRC §7345 authorizes the IRS to certify "seriously delinquent" tax debt — currently $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. For Memphis-based FedEx flight crews, touring musicians, international healthcare consultants, and Vanderbilt-affiliated researchers, decertification is often urgent and can be processed in 30 days or less.

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. The session opens with calendar call where the Court hears scheduling issues. Most cases on the calendar settle before trial; the IRS Office of Chief Counsel attorney for the case 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 typically within several months of trial. 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. 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 an informal conference at the Tennessee Department of Revenue Hearing Office, taxpayers may represent themselves or appear through an attorney, a CPA, or another authorized representative. For judicial review proceeding in Davidson County Chancery Court, an attorney admitted in Tennessee is required. VTL handles the federal side of overlapping matters and coordinates with Tennessee counsel where state-court litigation is necessary. Many franchise-and-excise disputes resolve at the Hearing Office stage without ever reaching Chancery Court.

Songwriter royalties from a performing rights organization (BMI, ASCAP, SESAC) and mechanical royalties from a publisher report on Form 1099-MISC, Box 2 (royalties). For an active songwriter, the IRS generally treats this as self-employment income under IRC §1402, subject to the 15.3% self-employment tax in addition to ordinary income tax. Passive royalty recipients (heirs, non-songwriter beneficiaries) generally report on Schedule E and avoid SE tax. The classification turns on whether you actively write — not whether the royalty stream traces to a song you wrote years ago. Quarterly estimated tax payments under IRC §6654 are usually required.

Short-term rental income from a Gatlinburg, Pigeon Forge, or Sevierville cabin reports on Schedule E (rental, where average stay exceeds 7 days) or Schedule C (where average stay is 7 days or less and substantial services are provided). Airbnb and Vrbo issue Form 1099-K. The IRS matches 1099-K data against filed returns; unreported rental income often surfaces in CP2000 notices. Tennessee also imposes state and local occupancy taxes (administered locally) and the state's 7% sales tax on short-term rentals under Tenn. Code Ann. §67-4-1425. We file amended federal returns, address state-tax exposure with local counsel where needed, and request reasonable-cause penalty abatement.