{"id":1263,"date":"2018-08-21T06:27:00","date_gmt":"2018-08-21T10:27:00","guid":{"rendered":"https:\/\/www.harringtonlawassociates.com\/?p=1263"},"modified":"2018-10-11T15:09:11","modified_gmt":"2018-10-11T19:09:11","slug":"tax-controversy-part-iii-tax-court-2","status":"publish","type":"post","link":"https:\/\/myhlaw.com\/es\/tax-controversy-part-iii-tax-court-2\/","title":{"rendered":"TAX CONTROVERSY–PART III: TAX COURT"},"content":{"rendered":"

This\u00a0article is a\u00a0continuation of our\u00a0series\u00a0concerning the key stages and considerations in\u00a0tax controversy<\/a>. \u00a0(For a general overview, click\u00a0here<\/a>. \u00a0For tax audits, click\u00a0here<\/a>). \u00a0When we say \u00abtax controversy,\u00bb most people think of\u00a0audits, which is certainly not wrong. \u00a0However, the process can go beyond just an examination of your return.<\/h2>\n

In reality, most disputes with tax authorities are settled. \u00a0There is not a whole lot to talk about if you reach a settlement. \u00a0You basically pay and move on with your life. \u00a0Here, we will discuss what you can do when you are unable to reach an agreement with the examining agent and are considering tax litigation. \u00a0Let’s look at a typical scenario.<\/p>\n

You received a letter from the IRS (or DOR), so you went through a period of providing documents and information to the agent in charge of your review. \u00a0Maybe you even had an office meeting or two with the agent. \u00a0Despite your best efforts, the agent rejects the tax treatment in your return and presents you with a large bill, including interest and penalties. \u00a0So, now what?<\/p>\n

Actually, you do have some options:<\/p>\n

1) You can utilize one of the special settlement programs or request a conference with an appeals officer;<\/p>\n

2)\u00a0If the agent thinks you should pay more than $25,000, you can file a formal protest;<\/p>\n

3) \u00a0You can pay the amount the agent requires, and then file a claim for refund; or<\/p>\n

4) \u00a0You can file a petition with the court.<\/p>\n

\u00a0<\/strong>Special Settlement Programs & Conference with Appeals Officer<\/u><\/strong><\/p>\n

Typically, the agent will prepare a Form 5701 (or similar form) with the proposed changes. \u00a0Often, the agent will discuss the proposed changes with you prior to filing a formal report. \u00a0This is an important moment in the process because the agent has greater flexibility prior to filing the formal report. \u00a0You should make a push to cut a deal at this stage. \u00a0If that is not happening, however, then consider a low-level dispute resolution technique.<\/p>\n

There is something called the\u00a0Early Referral Program<\/a>, which allows you to get a specific issue(s) before the Appeals Division for review. \u00a0This program is designed to encourage quick resolution of key issues, which often facilitates agreement on remaining issues. \u00a0There is also the\u00a0Fast-Track Mediation<\/a>, which allows taxpayers in the Small Business\/Self-Employed Operating Division to request the involvement of the Appeals Division to mediate the case while it is still in the examination phase.<\/p>\n

If you are still unable to reach an agreement–or you make the strategic decision not to utilize one of the above programs–the agent will likely prepare and deliver to you what is commonly called the\u00a030-Day Letter<\/a>. \u00a0Along with the 30-Day Letter you will receive a copy of the\u00a0revenue agent’s report<\/a>, called the \u00abRAR,\u00bb which explains in detail the agent’s findings and basis for the proposed changes to your return.<\/p>\n

At this point, you may\u00a0request a conference<\/a>\u00a0with an appeals officer. \u00a0You have just 30 days to make the request, so do not delay.<\/p>\n