A tax lawyer Salt Lake City taxpayers hire is usually dealing with two agencies at once: the IRS and the Utah State Tax Commission at 210 North 1950 West. The deadlines that matter most are short. Utah gives you 30 days to contest a deficiency, and the IRS gives you 30 days to request a Collection Due Process hearing.

Last updated: October 2026

Key Takeaways

Two Tax Agencies, Two Different Rulebooks

Most Salt Lake City tax problems involve both the IRS and the Utah State Tax Commission, and an IRS adjustment frequently produces a related Utah issue. The Commission’s own appeal process builds in time for a taxpayer to resolve an associated IRS dispute first. The two agencies run on different clocks, different appeal routes, and different collection tools, and a tax lawyer Salt Lake City clients bring in is often there mainly to keep the two tracks straight.

The Deadlines That Decide a Tax Case

Missing a tax deadline rarely ends the case, but it moves you from the cheap, informal path onto the expensive one where you pay first and argue later. These are the windows a tax lawyer Salt Lake City taxpayers consult will check first.

Utah counts its 30 days from the date the Commission mails the notice, not from the day you open the envelope. If the last day falls on a weekend or legal holiday, the deadline rolls to the next business day under 59-1-501(4). Calendar it the day the letter arrives.

IRS Audits: What Actually Drives the Outcome

The IRS generally has three years from filing to assess, six years when more than 25% of gross income was left off the return, and no limit at all for a fraudulent return or no return. Issues that commonly come up in small business audits include unreported deposits, vehicle and travel deductions, owner draws booked as expenses, and contractors who look like employees.

Penalties scale with the reason for the error. The accuracy-related penalty under 26 U.S.C. 6662 is 20% of the underpayment. The civil fraud penalty under 6663 is 75%, and once the IRS proves any part of an underpayment was fraudulent, the whole underpayment is presumed fraudulent unless you prove otherwise. An audit that starts to sound like a fraud inquiry needs a lawyer immediately.

Under 26 U.S.C. 7521, you may record an interview, and it must stop if you ask to consult a representative. And the federally authorized tax practitioner privilege in 7525 covers only noncriminal matters. Communications with a CPA can lose protection if a case turns criminal, which is why a tax lawyer often engages the accountant directly under what is called a Kovel arrangement. For the full picture on that line, see tax investigations and the overview of tax audits.

IRS Collections: Liens, Levies, and CDP Hearings

Once tax is assessed and unpaid after demand, a federal tax lien arises automatically under 26 U.S.C. 6321 against everything you own, real and personal. It dates from assessment under 6322, recorded or not. Recording adds priority: under 6323(a), the lien is not valid against purchasers, secured lenders, mechanic’s lienors, or judgment creditors until notice is filed in the office the state designates for property located there. For a Salt Lake County homeowner, that recorded notice is what typically surfaces in a title report and stalls a sale or refinance. See tax liens.

A levy is the actual seizure. Before most levies, 26 U.S.C. 6331(d) requires written notice at least 30 days in advance. A levy on wages is continuous under 6331(e): it attaches to every paycheck until the IRS releases it. See tax levies for the mechanics.

Why the CDP hearing is the most valuable 30 days in federal collection

A Collection Due Process hearing under 26 U.S.C. 6330 is heard by the IRS Independent Office of Appeals, not by the collection employee who sent the notice. At the hearing you may raise spousal defenses, challenge whether the collection action is appropriate, and propose alternatives: a bond, substitution of other assets, an installment agreement, or an offer in compromise. You may also dispute the underlying tax itself if you never received a notice of deficiency or never otherwise had a chance to contest it.

The Appeals officer must verify that the IRS followed every applicable legal and administrative requirement and must weigh whether the proposed levy is more intrusive than necessary. While a timely hearing is pending, 6330(e) suspends the levy and also pauses the 10-year collection period under 6502. If Appeals rules against you, you have 30 days to petition the Tax Court.

The IRS generally has 10 years from assessment to collect a tax by levy or court proceeding. Installment agreements and pending CDP hearings can extend that period, so the expiration date is a calculation, not a guess.

26 U.S.C. 6330(e) and 6502, via Cornell Legal Information Institute

Payment Plans and Offers in Compromise

Most people who owe the IRS need the right payment arrangement, set up before a levy hits, rather than a negotiated settlement. The IRS payment plan page lists the current options and fees. Individuals can apply online for a long-term plan if they owe $50,000 or less in combined tax, penalties, and interest and have filed all required returns, and for a short-term plan if they owe less than $100,000. Businesses apply by phone or through the number on their notice.

An offer in compromise is the tool people ask about first and qualify for least. The IRS compares the offer to what it believes it can collect from your equity and future income. A lump sum offer requires 20% of the offered amount with the application and the balance in five or fewer payments after acceptance. Under 26 U.S.C. 7122(f), an offer not rejected within 24 months of submission is deemed accepted, though time in appeal does not count. And the IRS keeps its lien in place until the accepted offer is fully paid. A deeper walk-through is in offer in compromise.

Payroll Taxes and the Trust Fund Recovery Penalty

Payroll tax debt is the most dangerous tax problem a Salt Lake City business owner can have, because it does not stay with the business. When a struggling company uses withheld employee taxes to make rent or pay a supplier, 26 U.S.C. 6672 makes any person responsible for paying it over, who willfully fails to do so, personally liable for a penalty equal to 100% of the unpaid trust fund tax. Before assessing it, the IRS must send written notice at least 60 days ahead of notice and demand under 6672(b).

Utah has its own version. Utah Code 59-1-302 imposes the same 100% penalty on a person who willfully fails to collect, account for, or pay over Utah withholding tax, sales and use tax, and several fuel and municipal taxes. The statute lists what counts as prima facie willfulness:

• A voluntary, conscious decision to prefer other creditors over the state, or to use the tax money for personal purposes.
• Reckless disregard of obvious or known risks that the tax would not be paid.
• Failing to investigate or correct mismanagement after having notice that the tax was not being paid.

Utah does not require a bad motive or intent to defraud. Paying the employees and the landlord first, with every intention of catching up on sales tax next month, can be enough. A proposed penalty can be contested by petitioning the Commission, and entity structure is no defense. For the broader business picture, see a business lawyer in Salt Lake City.

Disputing a Utah State Tax Commission Assessment

The Utah State Tax Commission sits at 210 North 1950 West, Salt Lake City, UT 84134 (801-297-2200). Its Appeals Unit, at the same address, takes calls at 801-297-3900. Most proceedings run by video, and in-person hearings are generally held at the Commission’s Salt Lake offices, a short drive for any tax lawyer Salt Lake City clients retain.

The Utah appeal path, step by step

1. Petition within 30 days. File a written request for agency action within 30 days after the Commission mails the notice of deficiency, 90 days if the notice was sent outside the United States. No special form is required, but the petition should identify the tax type, period, amount, and the notice being appealed. Miss the window and 59-1-501(7) leaves only one route: pay the tax and file a refund claim.
2. Status conference. Audit appeals are routinely set for a telephone status conference with an administrative law judge. The Commission reports that most income tax audit disputes resolve through negotiation at this stage.
3. Initial hearing. If the case does not settle, it goes to an initial hearing under 59-1-502.5 before a commissioner or administrative law judge. No record is kept, and what is said there is privileged and is not an admission against interest. The Commission may settle, compromise, or reduce the deficiency at or after that hearing.
4. Formal hearing. Either side may request a formal hearing within 30 days of the initial decision. The formal hearing is recorded, witnesses testify under oath subject to cross-examination, and exhibits must be exchanged 10 business days in advance.
5. Judicial review. Within 30 days of the formal decision, a taxpayer may choose under 59-1-602 between the district court, which hears the case as an entirely new trial under 59-1-601, and the Utah Court of Appeals or Supreme Court, which defer to the Commission’s factual findings under 59-1-610 but give its legal conclusions no deference. District court venue follows the taxpayer’s residence or principal place of business, so a Salt Lake City taxpayer lands in the Third Judicial District Court at the Matheson Courthouse, 450 South State Street.

Two Utah features surprise people. Under 59-1-611 a taxpayer seeking judicial review must post security for the deficiency unless the Commission grants a waiver, which it may not unreasonably deny. And under 59-1-1417 the taxpayer generally bears the burden of proof, but taxing statutes are construed strictly in the taxpayer’s favor and exemptions strictly against.

Utah penalties are also negotiable. Section 59-1-401 sets a 10% negligence penalty measured only on the negligent portion and much larger penalties for intentional disregard and fraud, and subsection (14) lets the Commission waive, reduce, or compromise penalties and interest for reasonable cause. The broader comparison of appeal routes is in tax appeals process.

How Utah collects

If a liability is not paid within 30 days after the Commission mails notice and demand, 59-1-1414 lets it file a warrant with the district court clerk in any county where the taxpayer owns property, or issue a warrant directing the sheriff to levy on and sell property. Once a warrant is filed, 59-1-1420 allows an administrative garnishment of wages and other property held by third parties, with the same effect as a court writ and subject to the procedures of Utah Rule of Civil Procedure 64D.

Business Tax Disputes in Salt Lake City

Two Commission divisions, Income Tax and Education and Business Taxes and Discovery, issue the notices of deficiency for individual income tax, corporate franchise tax, sales tax, fuel tax, and other tax types. For Salt Lake City businesses the recurring fights are predictable:

• Sales tax audits, where missing exemption certificates or unreported sales turn into a deficiency for every open period.
• Withholding shortfalls that open the door to the 59-1-302 personal penalty against owners and officers.
• IRS adjustments that lead to a related Utah deficiency, which have to be coordinated so the two agencies do not end up on inconsistent numbers.
• Estimated assessments issued when a business stopped filing, which Utah treats as having no assessment deadline at all.

The best defense in a sales tax audit is records that exist before the audit starts, kept at least as long as the Commission can assess. Asking for an audit delay and then refusing a written extension invites an estimated assessment under 59-1-1410.

When You Need a Tax Lawyer in Salt Lake City, and When You Do Not

A good tax lawyer Salt Lake City residents call should say plainly when they do not need one. Many tax problems are handled well, and more cheaply, by the taxpayer or a CPA.

A note on roles: in a tax controversy, this firm handles the legal side (deadlines, petitions, hearings, negotiation, and penalty exposure) and works alongside your accountant, who handles the numbers. When a matter carries criminal risk, engaging the accountant through counsel helps protect those communications.

Written by Jeremy Eveland, an attorney licensed in Utah, Nevada, California, and Texas, who represents businesses and individuals in IRS and Utah State Tax Commission disputes alongside their accountants.

This article is general information, not legal advice. Fees, thresholds, and agency procedures change. Reading it does not create an attorney-client relationship.