Did you know that your right to appeal precedes the Internal Revenue Services’ (IRS) right to assessment? The IRS is not free to unilaterally assess taxes against you. You have important rights to challenge any alleged assessment they present. The process of challenging their correction notification is known as the Deficiency Procedures. A proper challenge halts the IRS rights to make assessment or undertake collection until your appeals rights have been exhausted.
In a recent report, the IRS’s National Taxpayer Advocate reported that an average of twenty five percent of all individual tax returns filed contained errors. Based up on that figure, it can be surmised that approximately thirty one million U.S. tax paying citizens receives some form of correction notice communication in any given year. Upon investigation, the General Accounting Office (GAO) found that forty eight percent of all IRS correction correspondence and actions regarding account adjustments were either incorrect, unresponsive, unclear, or incomplete. Years following their initial audit, the GAO returned to review what kind of over sights and programs had been instituted to correct the inaccuracies they uncovered during their audit. They discovered not much had been done.
There are a number of exclusions included in the deficiency procedures rules. These exclusions open to the IRS numerous circumstances under which it may assess additional taxes. Often, they do so without regard to the tax payer’s appeals rights. The Internal Revenue Service uses these exclusions to collect additional billions of dollars annually. There are nearly three hundred different correction notice letters used by the IRS to communicate alleged errors. The three most common are; you did not report all of your income, you made a math or clerical error, and you failed to file your return.
What do you do if you get one of these notices? You must act properly and promptly to their communication. You must communicate firmly and politely writing that the correction notice is in error and demand that it be corrected immediately. This must be done within sixty days of receipt of their notice. Your letter to the IRS must declare that you are filing a “request for abatement”. An abatement is the process of canceling the debt as though it never existed. If you follow the correct procedures, the IRS has no choice but to abate the assessment.
According to tax code section 6213(b)(2), the Internal Revenue Service has no latitude in complying with your request and may not dispute or ignore your timely written demand. There is no burden of proof on the issue. You are not required to prove the notice is wrong in order to win the abatement. The code merely states that the IRS shall abate the assessment upon demand. However, please be aware the IRS does have recourse if it truly believes you owe the tax. It may reassert the liability after the abatement. But dealing with that is another article.