Sometimes, I have taxpayers come into my Richardson, TX tax office, who have been assessed income taxes by the IRS, but where they believe they don’t owe the tax. Your first thought might be, “Does this really happen”, but surprisingly, it does happen. As more and more tax returns are automated through the IRS correspondence process and the IRS is working with less human staff, I’ve seen more of it.
How does it happen? When the IRS sends notices, some taxpayers simply ignore the notices, some don’t respond properly, and some respond properly but the IRS simply makes an error when reviewing the documentation. If the taxpayer doesn’t provide the IRS with the necessary documentation, or doesn’t follow through with the Collections group, or take advantage of their opportunity to Appeal the issue when the IRS does not review it properly, eventually the tax will be assessed against the taxpayer.
The good news is that it’s not over and the you still have options. Those options include:
- Audit Reconsideration
- Doubt as to Liability Offers-In-Compromise
- Collection Due Process Hearings
- Refund Litigation
Which option you will choose depends on your personal and unique circumstances. For example, if you are due a refund, you may not want to choose an Offer-In-Compromise since you cannot claim a refund when doing so. If you have substantial debts with other creditors, you may want to explore bankruptcy. To request a Collection Due Process hearing, you must have received notice of your right to request the hearing. The option you choose is important and can be critical to achieving the best result possible.
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