Facts About IRS Audits
By Tim Wooten
With all of the chaos out there right now, the division and shouting, it’s helpful to try to tune out the shouting and focus on what is actually in our sphere of productivity.
One way that the IRS has decided it can be more productive is by outsourcing their collections efforts.
So you know how you always hear that the IRS won’t be contacting you by phone? Well, this year, that is all changing.
Included in a highway bill (of all things) was a little nugget that beginning in the spring of 2017, the IRS would contract with outside debt collection agencies to try to bring in more bacon to the IRS coffers. And they will be calling.
If you owe the IRS significant money, you may receive a letter in the mail that looks like this: https://www.irs.gov/pub/notices/cp40.pdf
Such notices are going out to a little over 300,000 taxpayers, and they include a special “Taxpayer Authentication Number”, so that if you DO receive a phone call, you have a way to verify that it is a legit call and not one of the many scammers out there who go after those with tax debt.
[Learn more from the IRS here:
Of course, our job is to make all this baloney go away on your behalf — so if you owe the IRS over $10,000 … please do shoot me an email, and we can get started on fixing that problem for you, if we aren’t already.
Or, perhaps you’re dealing with an audit situation. Here are some thoughts about that…
“IRS Problems” Strategy Note
Facts About IRS Audits
“Success is nothing more than a few simple disciplines, practiced every day.” – Jim Rohn
It is common to feel like you are not getting a fair shake from an IRS auditor.
The auditor might seem unreasonable. It can feel like no matter what you do, the auditor cannot be satisfied. You are told you owe money to the IRS, and you know you don’t.
There is good news — IRS auditors are not the end of the road.
Before the IRS can finalize an audit, they are required by law to give you rights to dispute it in federal Tax Court and with an IRS appeals officer.
Before the audit becomes final, the IRS must notify you of your rights to dispute it. This letter is called a “Notice of Deficiency.” The Notice of Deficiency gives you a very important legal right – to take the IRS audit to Tax Court and have an independent judge review it.
You will have 90 days to file a “petition” to Tax Court after the IRS sends you the notice of deficiency. If the 90 days has already expired, you may qualify for audit reconsideration instead.
Before the IRS goes to trial, they will send your case to an IRS Appeals Officer for settlement. The IRS Appeals Officer’s job is to settle the case based on how a judge would rule, not an auditor. IRS Appeals Officers have flexibility not always shown by IRS auditors. Most IRS examination cases settle this way, with results not available from an auditor’s point of view.
Tax Court judges and IRS appeals officers perceive cases differently from IRS auditors. If you are right, you can testify to it – summarize to the appeals officer what you will tell the judge. If the IRS – in preparation for trial – sees that their auditor was being unreasonable, they will most likely make attempts to settle the case on the basis of how an independent judge would rule.
The auditor often has a small view of your case and does not consider how outsiders would decide it; that changes when the final decision is not that of the IRS, but is put in the hands of the Tax Court.
And in this case … well, it’s helpful to have a pro on your side.
Give us a call today.
The Wooten Firm, LLC
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