Many taxpayers will have problems with the IRS over their lifetimes. If you have never dealt with a case before or haven't in several decades, the process can seem perplexing and difficult. You might wonder what your options even are, especially given that tax notices often make it seem like you can pay up or suffer the government's wrath. Before you do anything, it's best to contact a tax attorney and learn about the potential defense options.
Respond to the Notice
Generally, tax cases start with notices. These are not friendly-looking letters. An IRS tax notice looks like a major bill that comes with the full threat of the government's power.
In reality, though, it's just a notice. You can and should speak with an IRS tax problems lawyer before replying to one. However, you may only have weeks to present a response, so seek counsel as soon as possible. Otherwise, you risk the government entering a default judgment against you.
Your options in responding are either to acknowledge the debt and make payment arrangements or to contest it. Even if you think the government is partially right, you'll have to send a letter formally explaining why you think the government is wrong. It is a good idea to pull your tax filings for that year so you can figure out what the IRS claims is the issue. Working with a tax lawyer, you can then present supporting documentation that shows what the government got wrong.
Going to Tax Court
If you're fortunate, the IRS accepts your response to the notice. Less fortunate folks, though, will end up in tax court. The big thing you should know is that tax court uses an entirely different standard of proof than criminal or even civil court does. The IRS only has the burden of proving that a tax offense seems to have happened. In such a scenario, make sure you're confronting the government with an IRS tax problems attorney present.
You have several options in tax court. First, you could stick with the defense that the government's math or accounting is just wrong. Second, you could assert that the IRS isn't correctly interpreting the law. These are considered substantive defenses.
Taxpayers may also present procedural defenses. You could argue that the IRS didn't use the right procedure in assessing the taxes or in issuing the initial notice. Taxpayers also can dispute how the IRS handled the notice, collections process, or transition to court.
An innocent spouse might assert that their partner committed the offense. Also, an innocent spouse may claim economic hardship.
For more info, contact a local company like IRS Trouble Solvers, LLC.
