Most taxpayers understand that they are taxed on their worldwide income. However, most are too hesitant to fight a tax bill from the IRS that they may receive without merit. The most important aspect to note for fighting an IRS bill is to understand and follow appropriate procedures.
The letters from the IRS
Typically, the IRS will send you a notice with a request to substantiate under-reported income or over-reported expenses. You have two options: 1) sign it and pay the outstanding bill or 2) sign it and indicate that you are contesting the bill. If you fail to respond to the initial notice, then you’ll receive an examination report, which is commonly referred to as the 30 day letter. At this point, you’ll definitely want to respond in a timely fashion and keep records of receipts to verify the mailing.
The IRS appeals process
The information that you send to the IRS will be reviewed and sent to the IRS appeals division if sent in accordance with the deadlines detailed in the initial letters. The IRS appeals division’s goal is to try to obtain the taxes owed and reach a compromise with the taxpayer. The best next step is to hire a tax attorney, enrolled agent, or CPA to act on your behalf in the court case against the IRS. You can represent yourself, but that’s typically less effective. You’ll also need to be very well-versed in the section of the tax code that directly relates to your tax matter. If you’re still not able to reach a resolution with the IRS, you’ll receive a notice of deficiency from the IRS, which effectively means you’ll have 90 days to respond to be heard in front of the tax court. However, you can still request that the IRS transfers your case back to the IRS appeals court.
What if I don’t respond to the IRS notices?
It’s best to still pay the IRS bill as you’ve been delinquent with meeting the deadlines in the notices. However, you can still sue the IRS for the tax refund if they don’t grant you one. This request will of course go to the courts.
More Questions? Browse Answers or ask your irs tax questions online.
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