Let’s say it happened to you. You received a notice for an IRS civil tax audit, you traded documents and telephone calls with the IRS, and you just got the letter from the IRS concerning the findings of the audit. According to the Internal Revenue Service (IRS), you owe more money than you feel is reasonable, or would like to pay. What now?
A very sensible thing to do at this moment is reach out to a good tax attorney with successful experience with civil tax audits. They will review your paperwork, and that of the IRS, explain your options and work with you to plan a strong strategy depending on your choices. That said, let’s cut to the chase and examine the general path forward:
- Fast Track mediation program: The Fast Track program gives you the opportunity to enter into mediation with an Independent Appeals Mediator who works with you and the IRS to resolve disputes and come to an agreement. The program is voluntary, mediation is not binding, and you can continue to pursue an appeal with the IRS directly if the outcome is not to your satisfaction.
- You have the right to appeal decisions of the IRS. The correspondence you received from the IRS with their decision likely included reference to the process by which you can appeal the decision. Technically, you have 30 days to respond in writing to the letter. Among other information, your response should include your identifying and contact information. Include a copy of the letter and decision from the IRS you are contesting, and a statement that you want to appeal the decision.
- It is important that you pay attention to the time limit for filing your statement and documents of appeal. If you do not, you may receive a letter from the IRS that is an official notice of deficiency. You can receive this letter if you owe additional taxes due to the auditor’s decision and if you missed the 30-day window to file your statement reporting your intent to appeal the finding.
- An Appeals conference is scheduled after your statement to appeal is filed. The conference is your opportunity to make your case to an Appeals Officer who has not before been involved in your case. You can explain your position, review your documents, statements, and other information. The Appeals conference can oftentimes be a successful venue for coming to a workable agreement with the IRS. If you do reach agreement with the Appeals Officer, you will be mailed a Consent to Proposed Tax Adjustment reflecting your agreement which you can sign and return to the IRS in the mail.
If you do not reach a desired agreement with the Appeals Officer, there is an opportunity for you to continue your appeal in United States Tax Court.
Whether you have questions about an initial inquiry letter from the IRS or you are unable to work out a resolution with the IRS, an experienced tax attorney can offer invaluable guidance on potential next best steps.
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The tax lawyers at Robert J. Fedor, Esq., LLC help you handle questions about foreign bank accounts, payroll tax issues, or tax returns that are under review by the IRS. When you need personalized tax advice locally or abroad, call 800-579-0997. We have offices in Cleveland and Chicago.