Best Tax Lawyers in Philadelphia

About Tax Law in Philadelphia, United States

Tax law in Philadelphia combines three layers - federal, state and local - each with its own rules and enforcement processes. Residents and businesses must comply with federal tax laws administered by the Internal Revenue Service and with Pennsylvania state tax rules administered by the Pennsylvania Department of Revenue. On top of those, the City of Philadelphia administers local taxes that apply to wages, businesses, and property. Philadelphia tax practice therefore often involves navigating interactions among federal, state and city systems, understanding withholding and reporting obligations, and responding to assessments, liens or audits at any of these levels.

Why You May Need a Lawyer

Many tax issues can be handled without a lawyer, but certain situations benefit from professional legal representation. A tax lawyer brings legal strategy, formal advocacy, and specialized knowledge about administrative and court procedures.

Common situations in which people in Philadelphia may need a tax lawyer include:

- Facing a federal, state or local audit that could lead to large additional assessments or penalties.

- Receiving a notice of levy, lien or wage garnishment threatening assets or income.

- Being charged with alleged tax crimes such as tax evasion, filing false returns, or related fraud allegations.

- Disputing a property assessment or seeking relief through the Board of Revision of Taxes or the courts.

- Negotiating an installment agreement, an offer in compromise, or other resolution with tax authorities.

- Structuring business transactions or reorganizations to reduce tax exposure while complying with law.

- Handling multi-jurisdictional issues for commuters, remote workers, or businesses with operations in multiple states or cities.

Local Laws Overview

The following are key local and state tax topics that are particularly relevant to people and businesses in Philadelphia.

- Wage tax - Philadelphia imposes a wage tax on income earned within the city. Both residents and nonresidents who work in Philadelphia may be subject to withholding. Residency can affect whether all income is taxed or only income earned in the city.

- Business taxes - Philadelphia administers business taxes that may include taxes on gross receipts, net profits and business income. Business tax obligations depend on entity type, activity, and where income is earned or services are performed.

- Property tax and assessments - Property taxes in Philadelphia are assessed and collected based on values set by the city. Property owners can appeal assessments through the Office of Property Assessment and the Board of Revision of Taxes. Homestead exemptions and other relief programs may be available for qualifying owners.

- Withholding and payroll - Employers are required to withhold applicable city and state taxes from employee wages and to remit taxes on a timely basis. Payroll mistakes can lead to employer liability as well as employee complications.

- Penalties, interest and collection - Unpaid taxes can trigger penalties, interest and collection actions. Philadelphia and Pennsylvania each have administrative remedies including liens, levies and garnishments. Federal collection tools include tax liens and levies as well as seizure in serious cases.

- Criminal enforcement - Deliberate tax evasion, filing false returns or willful failure to file can lead to criminal charges at the federal or state level. Philadelphia authorities may refer matters for prosecution when they find evidence of criminal conduct.

- Credits, exemptions and local programs - Various tax credits, exclusions and relief programs may reduce tax liability. Eligibility rules and application processes differ between federal, state and local programs.

- Appeals and remedies - Taxpayers can appeal assessments administratively and in court. Different deadlines and procedures apply for federal, state and city appeals. Timely action is essential to preserve rights.

Frequently Asked Questions

Do I need a lawyer if the IRS or state sends me an audit notice?

Not always. If the audit is a simple documentation request, you may be able to respond without a lawyer. Consider consulting a tax attorney if the audit proposes significant additional tax, penalties or potential criminal exposure, or if you do not feel comfortable negotiating on your own. An attorney can protect privileges and negotiate more effectively with agents.

How do I contest my Philadelphia property assessment?

Start by reviewing the assessment notice and comparable properties. Philadelphia property owners can file an appeal with the Board of Revision of Taxes within the specified deadline. Gathering recent sale data, appraisal reports and documentation of errors will strengthen your case. A lawyer or appraisal expert can help prepare a formal appeal and represent you at hearings.

What happens if I cannot pay a large tax bill?

If you cannot pay in full, contact the taxing authority to discuss options. Possible solutions include installment agreements, temporary hardship arrangements, or offers in compromise at the federal or state level. Philadelphia may offer payment plans or relief for qualifying hardship cases. A tax lawyer can negotiate terms, prevent aggressive collection actions, and advise on alternatives.

Can I be criminally prosecuted for unpaid taxes in Philadelphia?

Simply owing taxes is not usually a crime. However, willful conduct such as deliberate tax evasion, filing false returns, hiding income or records, or using fraudulent schemes can lead to criminal charges at the federal or state level. Criminal tax cases are serious and require immediate legal counsel.

What is the difference between a tax attorney and an accountant?

An accountant or enrolled agent can prepare returns, advise on tax planning and represent you before tax authorities in administrative audits. A tax attorney offers legal representation, can assert legal privileges, handle criminal tax matters, litigate in court, and provide legal opinions on complex disputes. Depending on the issue, you may need one or both professionals.

How do local wage taxes affect commuters who work in Philadelphia but live outside the city?

Commuters who work in Philadelphia generally owe the city wage tax on earnings from work performed inside the city. Residency rules determine whether a person owes tax on all income or only on city-source income. Employers often withhold Philadelphia wage tax based on work location. If you believe withholding is incorrect, you can seek an adjustment or refund and may need legal help if the dispute is complex.

What should I bring to a first meeting with a tax lawyer?

Bring notices and correspondence from tax authorities, recent tax returns, bank statements, payroll records, notices of liens or levies, property assessment documents, business records if applicable, and a written chronology of relevant events. Clear organization of documents speeds assessment and allows the lawyer to give tailored advice.

How long do I have to challenge a tax assessment or seek a refund?

Deadlines vary by jurisdiction and type of tax. Federal deadlines for refund claims and audits generally follow statutory periods such as three years from filing, though exceptions apply. State and local deadlines may be shorter or different. It is important to act promptly - missing a deadline can forfeit your right to appeal or obtain relief.

Can I negotiate with the Philadelphia Department of Revenue myself?

Yes, taxpayers can and often do negotiate payment plans or dispute assessments directly. However, negotiations can be complex, and authorities may be more receptive to written arguments supported by law and documentation. A tax attorney can negotiate from a position of legal knowledge and can escalate matters when needed.

Where do I go for free or low-cost tax legal help in Philadelphia?

Philadelphia has nonprofit legal aid organizations and clinics that offer low-cost or pro bono assistance for eligible individuals. These programs may help with certain tax disputes, property assessment appeals, or basic tax problems. Contact local legal aid groups and bar association referral services to learn about eligibility and available services.

Additional Resources

The following governmental agencies and organizations are commonly involved in tax matters and can provide information or assistance:

- Internal Revenue Service - federal tax rules, audits, payment arrangements and the Taxpayer Advocate Service for unresolved problems.

- Pennsylvania Department of Revenue - state individual and business tax administration, guidance and appeals information.

- City of Philadelphia - Department of Revenue for local tax administration, Office of Property Assessment for property valuation, and the Board of Revision of Taxes for assessment appeals.

- Philadelphia Department of Licenses and Inspections and commerce divisions - for business licensing and local regulatory issues that interact with taxes.

- Community Legal Services of Philadelphia and Legal Aid of Southeastern Pennsylvania - nonprofit organizations that provide free or low-cost legal assistance for eligible residents.

- Philadelphia Bar Association - lawyer referral services and resources to help find qualified tax attorneys experienced in local issues.

Next Steps

If you need legal assistance with a tax matter in Philadelphia, follow these steps to move forward efficiently:

1. Gather records - Collect all relevant tax returns, notices, letters, bank and payroll records, property documents, and correspondence related to the matter.

2. Identify the urgency - Determine whether there is a deadline, pending collection action, or criminal exposure that requires immediate attention.

3. Get an initial consultation - Contact a tax attorney or legal aid provider for an assessment. Use the consultation to clarify the issue, learn likely options, and obtain an estimate of fees.

4. Ask key questions - Find out the attorney's experience with federal, state and Philadelphia tax issues, expected steps, timelines, costs and potential outcomes.

5. Consider temporary protections - If you face imminent collection such as levies or liens, ask the attorney about emergency measures that can pause enforcement while you organize your defense.

6. Evaluate resolution options - With counsel, weigh negotiation, administrative appeal, litigation or other relief paths, considering cost, likelihood of success and non-tax consequences.

7. Follow through on filings and deadlines - Ensure you or your lawyer file appeals and requests within required timeframes and provide requested documentation promptly.

8. Maintain compliance going forward - Address underlying filing or withholding issues to prevent recurrence, and consider tax planning to reduce future risk.

Taking timely and informed steps improves outcomes in tax matters. When in doubt about legal exposure or complex disputes, consulting a qualified tax attorney is the safest course of action.