Navigating IRS Disputes: Essential Steps
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Understanding IRS Disputes
Dealing with the IRS can be intimidating. Taxpayers often find themselves needing to resolve disagreements with the IRS over tax audits, assessments, penalties, fast-growing tax debt, liens, levies, and other disputes. Sometimes taxpayers do not want to open IRS mail because they dread the news. The tendency is to let IRS mail pile up, but that is the worst thing you can do. Understanding IRS procedure and knowing how how to work proactively with the IRS is crucial for a favorable outcome.
Common Types of IRS Disputes
IRS disputes can arise from many issues, including:
- Unfiled returns
- Notices of Deficiency
- Incorrect tax assessments
- IRS Audits
- Inability to Pay
- IRS Tax Levies
- IRS Tax Liens
- Penalties for late filings or payments, trust fund, or other penalties
- Innocent Spouse Claims
- Refund Claims, and more.
These disputes require careful handling to ensure that your interests are protected. Taxpayers have options to address and resolve these issues.
Current Compliance and First Steps
The first step is to thoroughly review IRS correspondence and look for response deadlines. If you are up against a deadline, do not hesitate to contact a tax lawyer to help you with a timely response. You do not want to miss a response deadline because you can potentially lose valuable appeal rights that can protect you. The IRS has procedures in place to protect taxpayers' rights, but if you do not follow the procedures, you can lose those rights and make yourself more vulnerable to IRS enforced collection by levy or seizure.
Secondly, it is crucial to stay CURRENT with tax filings and payments from this point forward. No matter how much you owe for old years or the nature of the IRS dispute, you cannot work with the IRS without getting into compliance for the current year and going forward. That includes making timely 1040 estimated tax payments, federal tax deposits (941, 940) if applicable, and timely filing income and other tax returns, as appropriate for your situation. After checking for response deadlines, CURRENT COMPLIANCE is the single most important step you can take to start working your way out of a tax problem. If you stay in current compliance, you will be in a position to work with the IRS to resolve your tax disputes.
Options for Resolving Disputes
Once you understand the nature of your IRS dispute, you have many potential avenues to resolve it so long as you are in current compliance, including but not limited to:
- Negotiation: Negotiation with the IRS may lead to a solution without escalating the issue further.
- Appeal: If you disagree with an IRS notice, proposal, or determination, you may be entitled to file an appeal, which will be reviewed by an independent appeals office within the IRS, or if you receive a notice of deficiency, you have the right to petition the U.S. Tax Court for help.
- U.S. Tax Court: In many cases, if you do not get results in Appeals, you can take your case to Tax Court to get it resolved.
- IRS Taxpayer Advocate. The Advocate is also a great way to get help when nothing else has worked.
Proactive Communication is Key
Regardless of the IRS dispute or how long it has been going on, it is never too late to consult with a tax lawyer about your options. I have represented business and individual taxpayers before the IRS for more than 25 years. Let's talk about your case and how I can help. Call me for a free consultation at 210-447-7572, or send me an email at [email protected]. IRS problems never get better when ignored.