3.1 AUDITS, APPEALS AND THE JUDICIAL PROCESS Flashcards
WHAT ARE SOME OF THE MOST COMMON TYPES OF TAX AUDITS?
A) CORRESPONDENCE - VIA MAIL “REQUESTING DOCUMENTATION”
B) OFFICE AUDIT - AT THE IRS “MORE EXTENSIVE THAN CORRESPONDENCE
C) FIELD AUDIT - AT THE TAXPAYER’S PLACE OF BUSINESS MOST EXTENSIVE
WHAT IS THE IRS PROCESS FOR SETTLING TAX DISPUTES?
AFTER THE IRS ASSESSES A DEFICIENCY AND THE TAX PAYER DISAGREES, IT SENDS THE TAXPAYER A 30-DAY LETTER EXPLAINING ITS REASONING ALONG WITH A COPY OF THE AUDIT EXAMINATION REPORT. THIS GIVES THE TAXPAYER 30 DAYS TO DO ONE OF THE FOLLOWING:
1) ACCEPT THE PROPOSED ADJUSTMENT AND PAY THE DEFICIENCY
2) SKIP THE APPEAL PROCESS AND WAIT FOR THE IRS TO ISSUE A NOTICE OF DEFICIENCY (90) DAY LETTER) (150 DAYS FOR A TAXPAYER WITH AN ADDRESS OUTSIDE THE US)
2A) AFTER THE 90 DAY LETTER, TAXPAYER CAN PAY THE DEFECIENCY OR FILE A PETITION WITH THE U.S. TAX COURT. FYI ALTHOUGH NOT EXPLAINES IN THE 90 DAY LETTER A TAXPLAYER CAN PAY THE DEFECIENCY AND THEN FILE A CLAIM FOR REFUND, (THE REFUND WILL LIKELY BE REJECTED AND THEN YOU CAN SUE THE IRS)
3) REQUEST A CONFERENCE WITH AN APPEALS OFFICER.
3A) DEFECIENCY MUST BE LESS THAN 10K RESULTING FROM A
CORRESPONDENCE OR OFFICE AUDIT
3B) FAST TRACK MEDIATION
VIEW SCREEN SHOT.
WHAT ARE THE LEVELS OF THE JUDICIAL PROCESS?
SEE SCREENSHOT,
- SMALL CLAIMS DO NOT HAVE PRECEDENTIAL VALUE - NO APPEAL IS ALLOWED FROM THE SMALL CASE DIVISION - FYI
- TAX COURTS ARE NOT REQUIRED TO PAY THE DISPUTE BEFORE JUDICIARY. (TAX EXPERTS) - (COURTS OF ORIGINAL JURISDICTION) (MAY APPEAL TO THE RELEVANT US COURT OF APPEALS)
- DISTRICT COURTS - COMPOSED OF GENERALIST, YOU FIRST PAY THEN YOU SUE, JURY TRIAL - (COURTS OF ORIGINAL JURISDICTION) (MAY APPEAL TO THE RELEVANT US COURT OF APPEALS)
- FEDERAL CLAIMS - (COURTS OF ORIGINAL JURISDICTION) - PAY THEN YOU SUE (MAY APPEAL TO THE RELEVANT US COURT OF APPEALS)
“THEIR ARE 13 CIRCUITS FOR COURT OF APPEALS”
“LASTLY DECESIONS FROM THE COURT OF APPEALS CAN BE APPEALED BY THE SUPREME COURT” (UNLIKELY)
