top of page

Yes, you can fight the IRS in court, but in which court?




If you receive a notice or bill from the IRS, first consider whether you want to fight it. If you know the IRS is right, fighting can be a waste of money. In fact, if the IRS is looking for a small amount of tax, you might as well not fight it, even if it's right. Just consider if it's worth it if the dollars are small. Sometimes arguing over something small can end up triggering other problems that are better left alone. Of course, what a small tax bill is means different things to different people, and the extent to which you need to be careful about other unrelated issues varies as well. But in most cases, if you get a bill for additional taxes, you'll want to keep your rights. The deadlines and the procedure in tax disputes are essential. To prepare a timely response and follow procedural rules, check out 13 Tax Notification Tips You Need to Know. For example, if you receive an Examination Report from the IRS, prepare a written protest, sign it, and mail it by the due date. Please keep a copy, along with proof of delivery by certified mail. Please explain thoroughly and attach documents where they are helpful. Your protest must discuss the facts and the law. The IRS may review your protest and agree with you, but if they don't, how you frame your protest may help later. If you protested in a timely manner, you will typically receive a response that the IRS is transferring your case to the IRS Appellate Division, a separate part of the IRS tasked with resolving cases.


If you do not protest or if you do not resolve your case on IRS Appeals, you will then receive an IRS Notice of Deficiency, which always arrives by certified mail. It can't come any other way. A Notice of Deficiency is often called a "90 day letter" because you will have 90 days to respond. Do not write to the IRS to protest a Notice of Deficiency. Only one response to a Notice of Deficiency is allowed: file a petition with the Tax Court at the office of the Clerk of the US Tax Court in Washington, DC If you don't properly respond to a Notice of Deficiency within 90 days, you typically must pay taxes and file a claim for a refund. If your request for reimbursement is not granted, you may sue for reimbursement in federal district court or in the US Court of Claims. USA. The main advantage of proceeding in Tax Court is that you do not need to pay the tax first. By contrast, most taxpayer lawsuits in US District Court or US Court of Claims are post-tax. Sometimes, however, you may be able to smartly shoe yourself on a forum, even though it may seem like you don't play by the rules.


Take the case of Colosimo v. US, where the IRS went after the company and its owners for payroll taxes. The owners sued in District Court over a ruling that they were not "responsible persons" required to pay payroll taxes. But homeowners paid only a fraction of the taxes the IRS was seeking. This was a clever use of the notion that sometimes you can pay only part of the tax owed, with your lawsuit resolving both parts of the tax declared: the part you paid and the part you didn't pay.

6 views0 comments

Comments


bottom of page