An unpleasant surprise... Many of you find it to be a grave injustice when you receive a tax debt notification from the IRS. You're sure you don't owe this money, and damn it... you're not going to pay. Just simmer down for a moment and let the IRS-Hitman give you some friendly advice. The IRS doesn't care if you think you owe the money or not. They don't care if you choose not to pay because they're going to get the money they say you owe one way or another.
Are you confident? If you are certain you're right, then you can always appeal your case with the IRS to have your tax return looked at again, and possibly get the tax debt removed. Let me warn you though, the IRS does not like to admit they're wrong. They will fight you tooth and nail to prove they're right no matter the debt amount. If you're serious about appealing your IRS tax debt, you need to be prepared, and that's where the IRS-Hitman comes in. I do want to give you one warning directly from the IRS, though:
"If the Tax Court determines that your case is intended primarily to cause a delay, or that your position is frivolous or groundless, the Tax Court may award a penalty of up to $25,000 to the United States in its decision."
What do you do? So how do you go about getting your tax debt appealed? The IRS will send you a letter stating how much you owe them and that they expect payment immediately. Once you receive that letter, you have 90 days to petition, in writing, a letter of protest requesting an appeal hearing.
It's on your shoulders... Of course, since you are appealing the IRS' decision, you better have some very good evidence to dispute their claim. So I hope you've saved all of your receipts, documents, bank statements, employer statements, etc.
You do not need legal representation to file an appeal. In fact, you don't even have to go to court. If you owe less than $25,000, you can claim a small case request and just go through the office of appeals, where you will discuss the case with an IRS appeals representative. And before you think you would be walking into the lion's den, the appeals office is separate and independent from the IRS.
You can also take your case to tax court. Again, you can represent yourself, but this is the big leagues, so you may need the services of a tax attorney or a CPA to help represent you.
The moment of truth... Once all of the evidence has been reviewed and the case heard, a decision is made. This isn't your average court hearing. In fact, you are guilty until proven innocent, and the burden of proof is on you, even if you have a tax professional helping your case.
If you're able to prove the debt was wrong, then it is erased and you don't owe it. In fact, you can even recoup some of your litigation costs for the tax hearing.
If, however, you weren't able to approve your case, then you still owe the balance, plus penalties and interest, plus the fees of the tax attorney.
A constant battle... You can fight the IRS, but you must be fully prepared to do so. The IRS does not play fair, and they are very poor losers.
Now you have the smoking gun... Use it!
Labels: IRS Appeals