Let's say your tax return is examined by the IRS and you do not agree with the results of the examination. What happens next? Are you just stuck in the mud or can you take the matter higher up? Luckily for taxpayers today, further appeal within the IRS is permitted.
When the IRS has concluded its audit it then issues what's known as a "30-day letter." This is a letter that gives you exactly 30 days in which to act. If you get one of these during your IRS audit and don't know what to do, please consider calling a tax lawyer for help.
Once the IRS has issued a preliminary 30-day letter, you have the right to appeal to a local Appeals Office by filing a written request for appellate consideration. This is the only level of appeal within the IRS. Appeals conferences are conducted in an informal manner, meaning that you can have the appeals conference by telephone and simply tell your side of the story. The IRS agent who did the audit will seldom if ever be on the phone with you, just the appeals officer.
A taxpayer who requests a conference may also need to file a formal written protest. However, if the protested amount is not more than $25,000, you may want to consider making a small case request instead of a formal written protest ( IRS Publication 556). You should also know that in addition to appeal or in lieu of appeal there's another avenue open to you. If you decide to forego the right to submit a protest to the Appeals Office after receiving a 30-day letter you can still file a petition in the Tax Court within 90 days after the receipt of a statutory notice of deficiency. That's a whole other article.
Here's another insight. Small business and self-employed taxpayers can resolve their IRS audit disputes through what's known as fast-track mediation. Disputes can be resolved through this expedited process within 40 days, compared to several months using the regular appeals process.
If you represent a large or mid-sized business, you can resolve their tax disputes through a fast-track settlement program. The goal for this program is to reach settlement within 120 days. A similar fast-track settlement program for small businesses and self-employed taxpayers is being tested by the IRS but no word of its status has been released yet.
Here's your takeaway: many taxpayers try to represent themselves during an IRS tax audit. They usually have varying degrees of success, especially when compared with the much more professional approach taken by tax lawyers. At any rate, if you're dissatisfied with the result of your audit, by all means call a tax lawyer for help with an appeal. It just may be worth every penny and much more!
by: John Ellsworth, Tax Attorney at http://www.IRS-SOLV.com Want to know more? Come to IRS-SOLV and read other articles. Thank you.
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