Sorrell Business & Tax Law

11/27/2025

Happy Thanksgiving 🦃

11/14/2025

Whitney Sorrell, Sr. moved his family from San Francisco to Scottsdale to develop industrial warehouse space when the city renamed Thunderbird Field to Scottsdale Airport. Today Whitney Sorrell Jr. embraces that history operating Sorrell Business & Tax Attorneys to help Scottsdale business owners protect their assets and minimize tax liabilities through smart legal planning.

When Whitney Sorrell first set up shop in the Scottsdale Airpark more than three decades ago, the district still looked much like its name implied — a collection of low-slung

11/22/2024

Feeling overwhelmed by unfiled tax returns? 🤯
It often starts with missing one year, and before you know it, it's been seven years... Don’t let the snowball effect take over. Here’s how to tackle it and get back on track:

It's more common than you think—many clients come to us after missing a year or two of filing tax returns. Then fear and uncertainty take over, leading to even more missed years. Suddenly, it’s been seven years since they’ve filed, and they’re faced with massive penalties and interest. But there is a way out!

Here's how to get back on track:

1. Confront the issue. Don’t let fear keep you from taking action. The longer you wait, the more penalties and interest will pile up. Contact a professional who can guide you through the process.

2. Gather your financial records. This part can be challenging—reconstructing your financial history from several years ago isn't easy. Dig through old bank statements, find canceled checks, and review all deposits and expenses. Every bit of information helps build a clearer picture of your finances.

3. File your returns with the information you have. Even if you don’t have every detail, it’s better to file with what you have than not to file at all.

4. Set up an installment agreement or explore collection alternatives. At this point, avoiding penalties isn’t possible, but you can manage what you owe. Work with the IRS to establish an installment plan, apply for an Offer in Compromise, or consider other options to make repayment more manageable.

Unfiled tax returns don’t just disappear—they compound over time. Tackling them now with the help of a professional can save you from skyrocketing penalties and reduce stress.

Taking action today can set you on the path to financial recovery. If you’re ready to take the first step, contact us—we’re here to help.

11/15/2024

Struggling with an IRS Issue? A Taxpayer Advocate Could Help.

If you’re facing problems caused by IRS procedures, there’s a resource you may not know about: the Office of the Taxpayer Advocate. While part of the IRS, taxpayer advocates operate independently to help resolve issues when IRS processes break down, especially if they lead to financial hardship.

Here’s how a taxpayer advocate can help:

When IRS Procedures Cause Hardship: Advocates step in when delays, incorrect assessments, or holds on accounts cause undue hardship. They work to get the problem resolved and help move things forward.

When IRS Actions Are Overly Aggressive: Sometimes, IRS collection actions—like wage garnishments—go too far and create severe financial difficulties. An advocate can halt these actions while a solution is worked out.

When There’s No Process for Your Problem: Not all IRS processes are perfect. Issues like identity fraud or other unique situations might require an advocate's help to navigate gaps in the system.

Taxpayer advocates are not lawyers, but they can be crucial allies when dealing with IRS complexities. If you’re stuck in a tough situation with the IRS, consider reaching out to an advocate. They could make all the difference.

Need help understanding your options? Contact our firm today for guidance.

11/08/2024

Did the IRS File a Tax Return for You? Here’s What to Know.

If you haven’t filed your tax return, the IRS can file one for you, called a Substitute for Return (SFR). The problem? An SFR doesn't consider your deductions or expenses, meaning you could owe more than you should.

This often happens when people miss IRS notices because they didn't update their address. If you don’t respond, the IRS will assess the tax and start collection.

An SFR also isn't dischargeable in bankruptcy. To avoid these issues, file your own return—even if it's late. This replaces the SFR and can reduce your tax liability.

If you’ve received an SFR, don’t ignore it. Contact a tax attorney so you can protect your financial future.

11/01/2024

Received a "Statutory Notice of Deficiency" (90-day letter) from the IRS?

This is your last chance to dispute the amount of tax they claim you owe.

This letter is issued after an audit when there’s a disagreement over taxes owed. You have 90 days to file a petition with the U.S. Tax Court. Miss the deadline, and your options vanish. The tax will be assessed, and the IRS will start collection—no extensions, no second chances.

If you get a 90-day letter, reach out to a tax attorney right away. Filing a tax court petition within the 90-day window keeps your rights intact to challenge the IRS’s claim.

If you need help navigating this process, our team is here to assist you.

10/25/2024

How far can the IRS go to collect unpaid taxes?

Asset seizure is one of their most drastic tools. But it’s important to know it’s not the first step—it’s the last resort. The IRS only considers seizing assets after multiple attempts to work out a payment plan have failed, and the taxpayer remains unresponsive.

Before any seizure, several levels of IRS management must approve it. They must show that taking the asset won’t cause financial hardship or impact necessary living expenses. However, mistakes happen. We’ve seen cases where assets were wrongfully seized due to misrepresented facts, such as a veteran’s IRA that was being used for essential living costs.

If the IRS seizes your IRA, it’s treated as income, creating a new tax bill. The IRS might leave just enough in the account to cover this new tax—adding insult to injury.

The takeaway? Don’t ignore IRS notices. Act early, understand your rights, and consult a tax attorney to protect yourself.

10/18/2024

Tax evasion isn’t a simple “mistake.” It’s deliberate deception.

The IRS has powerful tools to catch those who hide income, and the consequences can be severe: criminal charges, massive fines, and even jail time.

Three examples of tax evasion:

Lavish Lifestyle, No Income Reports: A company president drives luxury cars and lives in a multimillion-dollar home but never files a tax return. This is clear tax fraud.

Hidden Cash Transactions: A business owner omits every 14th invoice when reporting income to their CPA. The IRS catches this by matching bank deposits to invoices, uncovering hundreds of thousands of unreported income.

CPA Turns Criminal: Even trusted professionals can get caught up. I had a case where a CPA helped clients hide income—until he was indicted for another crime and changed his story.

The lesson?

Don’t take shortcuts. Tax evasion isn't worth the risk. Always work with professionals who play by the rules.

10/11/2024

Did you know that unpaid employment taxes can become your personal liability? The IRS takes unpaid employment taxes very seriously, and under the Trust Fund Recovery Penalty (TFRP), they can come after anyone who had knowledge and control of financial decisions—even bookkeepers or CFOs.

Here's what you need to know:

Severe Consequences: The IRS can impose liens, garnish personal bank accounts, and even seize retirement funds.

Not Just for Owners: If you were involved in paying bills or handling payroll, you could be held personally liable for unpaid employment taxes—even if you didn’t have the final say.

There Are Defenses: If you can prove you didn’t have the authority or were outvoted on financial decisions, you may avoid liability.

If you’re handling your company’s finances, be aware of the TFRP and protect yourself from unexpected personal liability.

10/04/2024

Heard about a way to “avoid” paying taxes?
Be careful—it could be a tax protester scheme. These scammers disguise themselves as “tax planners” and use legal jargon and misleading claims to convince people that taxes are "voluntary" or that the 16th Amendment wasn't legally enacted.

They push ideas like transferring business ownership to “pure trusts” or “common law trusts” to evade taxes. Unfortunately, falling for these tricks can lead to serious legal trouble—even jail time.

Here’s the reality: The IRS lists these schemes in their "Dirty Dozen" tax scams. If it sounds too good to be true, it probably is.

Stay safe: Always consult with a trusted tax professional before making any decisions about your taxes.

09/27/2024

Overwhelmed by IRS tax debt?
Think you can't get rid of it through bankruptcy? Think again.

While not all tax debts are dischargeable, many older liabilities can be wiped out. Here’s what you need to know:

Filing for bankruptcy triggers an automatic stay, stopping the IRS from collections immediately.
Discharge rules: The tax debt must be from a return you filed (not the IRS), at least three years old, and the IRS assessment must be 240 days old or more.
Older debts: Tax liabilities from three or more years ago that meet these criteria can often be discharged.
Bankruptcy might be your path to a fresh start when dealing with unmanageable IRS debt.

Questions? Send a DM!

09/20/2024

IRS agents can be overly focused on technicalities, denying deductions even when business expenses are legitimate. It’s frustrating, but there’s a smart move most don’t know: going to tax court.

The IRS’s goal isn’t to collect the most tax, but the correct amount. Yet, some agents won't negotiate fairly until you push back with a tax court petition. Here's how it works:

Start with IRS Appeals: Many disputes get resolved here.
File a Tax Court Petition: This move signals that you’re serious and can lead to better settlement options.
Negotiate Again: Filing gives you another chance with an appeals officer who now has more authority to settle.
Often, just filing for tax court gets the IRS to take negotiations seriously—no courtroom needed.

Key takeaway? Filing for tax court can be the leverage you need to resolve your audit favorably.