The deadline for Tax Season 2023 for individuals is over, and those who filed for refunds will be receiving the same within 21 days from the filing date. But, If the taxpayers have received a notice from the IRS that their taxes are incorrect or that they owe money, they can either pay or dispute if IRS is wrong. There are options available to resolve such disputes. The IRS dispute process is an essential part of the tax system, but it can be complicated and intimidating. Managing a dispute with IRS can be a complex and compelling process for taxpayers. Following are the steps to manage a dispute with the IRS. The first step in managing an IRS dispute is understanding how the process works, and what options are available for appealing or litigating the issue at hand.
Understanding the IRS Dispute Process
The IRS dispute procedure consists of numerous steps. Taxpayers can file a dispute if they disagree with the amount of tax they are required to pay or believe the IRS made a mistake in their tax return. If there are any changes that would affect their refund or balance payable, the first step is to file Form 1040X. Taxpayers can submit Form 9465, Form 8857, or Form 843 with the required supporting paperwork if there are no changes. These forms include Instalments Agreement Request, Request for Innocent Spouse Relief, and Claim for Refund and Request for Abatement, respectively. Ensure that taxpayers submit all required forms and documents to initiate the dispute process.
If there is no communication from the IRS regarding the dispute after 90 days from the filing, it is time to move forward with appealing their decision. To do so, follow these steps:
Appealing IRS decision
Taxpayers have the right to appeal an IRS decision, and taxpayers have the right to use the two-step appeals process which involves an administrative appeal. Taxpayers need to submit a written request for reconsideration to the office that made the initial decision within 60 days of receiving a letter of disallowance. This can be done by letter, fax, or online at www.irs.gov/appeals. Taxpayers can request Form 12356-A, which offers guidance on how to complete and submit the appeals with necessary supporting evidence. This phase of the investigation aims to identify why the IRS took certain actions, such as reducing refunds.
Litigating IRS Dispute
Taxpayers need to take legal action if they are unable to resolve their dispute with the IRS. The IRS offers several options for litigating disputes that include.
- Filing a lawsuit against the IRS in court. If a taxpayer has a valid reason for disputing an assessment or collection activity, they can file suit against the IRS in federal court or state court if applicable. Throughout this process, they need a tax attorney who specializes in tax law to represent them.
- Requesting a management hearing with the Appeals Office Reviewer (AOR) is another option when appealing an IRS decision. AOR evaluation from the relevant evidence before determining whether to grant relief or not. This step does not guarantee relief, but it’s usually the first taken in appeals.
The IRS dispute process can be confusing, but it’s important to know taxpayers’ options. It is important to understand the steps included and the options available to taxpayers for resolving the issue. This may include communications with IRS and providing additional information to support their position, requesting an appeals conference with an independent appeals officer, or considering mediation. In some cases, litigation may be necessary. Therefore, seeking tax professional advice and guidance throughout the process can help ensure that taxpayer’s rights are protected and they’re able to achieve the best possible outcome. IRS Audit Group is a tax audit representation company that helps taxpayers navigate such time-consuming dispute processes. Contact us for a free consultation. https://irsauditgroup.com/contact/
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