If the Internal Revenue Service finds something wrong with your taxes, it’ll send you a notice. You can either comply with the instructions in the notice, which can range from a simple submission of documents to paying extra taxes. If you disagree, you can check a box indicating your position and send a note explaining why you disagree.
The IRS may subsequently reject your challenge with another notice. You have the right to discuss your position in person with the employee mentioned in the letter your received. If you disagree with the employee, you can discuss the situation further with his or her supervisor. It’s important to remain calm and professional. Think of it as a disagreement rather than an “us vs. them” situation.
If the personal interaction gets you nowhere, you still have two more options:
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Try the Office of Appeals, which is an independent office for judging your case with a fresh perspective. Your notices contain explicit instructions on how to contact this office.
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Approach the US Tax Court. You do not need a lawyer if you’re challenging an amount under $50,000 in a “small tax case” procedure. This is similar to small-claims court and all you have to do is file a small fee. You’re then given ample opportunity to explain your case, present your evidence, and answer the judge’s questions. Rulings from the Court are final and cannot be appealed.
If all this seems a little intimidating, contact us at any stage of this process. Our expertise in both accounting and tax services can help you navigate the often tricky and complex shoals of IRS waters.