Tax Audits & Examinations
Each year the Internal Revenue Service alone examines more than 1.8 million individual and business tax returns. A return could be selected for audit for various reasons, such as a mismatch of information on file with IRS, questionable or excessive deductions and expenses, or a random check to ensure compliance with the tax laws and regulations.
When a return is selected for examination, the IRS is required to inform you in writing by sending a Notice or an Initial Contact Letter. The IRS must also inform you about your rights as a taxpayer, state the issues or findings in question, and ask you to submit an explanation. From that point onwards, more than 75% of all examinations are conducted through correspondence. Field and office audits account for less than 25% of all examinations.
Probably the most common form of communication a taxpayer receives is a computer-generated Notice CP-2000, which indicates a discrepancy between the IRS records and amounts stated on the return. The CP-2000 reports the examiner's findings and will ask you to submit a reply within 30 days of receipt.
If you disagree with the conclusions made, you may request a hearing or conference with the IRS and try to resolve the disagreement. An essential point of your rights as a taxpayer is the right to appoint a qualified representative to communicate with the IRS on your behalf. And we strongly recommend you to do so. When it comes to audits and examinations, our Certified Public Accountants and IRS Enrolled Agents have unlimited rights to represent your interests before the IRS. We are always ready to take over your case as soon as an issue arises.
Tax Appeals & Representation
If you are unable to resolve your dispute with the IRS examiner, you may request a conference with the Appeals Office. The Appeals Office is independent of the IRS Examination Division and is an alternative to litigation. A formal protest in writing must be filed with the Appeals Office if the proposed change is $25.000.00 or more.
Once your protest is filed, the Appeals Office has a variety of options including to settle the case in your favor, return a matter to the Examinations Division for additional review, negotiate an acceptable settlement, or close the case by withstanding the examiner's findings.
Our CPAs and IRS Enrolled Agents are ready to assist you in preparing and filing a formal protest and presenting your case to the Appeals Office. We will also consider the hazards of litigation and we will negotiate on your behalf aiming to reach a favorable agreement with the IRS.
Assessment, Abatement & Notice of Deficiency
The collection process starts with an assessment of the final tax liability, including applicable penalties and interest. In tax deficiency cases, the IRS will issue a Notice of Deficiency or the so-called 90-day letter. The Notice will give you 90 days to prepare and file a Tax Court petition. The filing deadline is automatically extended to 150 days for international taxpayers and for US persons whose address on record with the IRS is outside the USA.
If you agree with the Notice of Deficiency, you may sign and return the Notice to the IRS. You may also pay the amount due at any time. Later on, you will be allowed to file a request for abatement of penalties and interest if you believe there is a reasonable cause, or if the IRS erred in computing the amount.
If you disagree with the Notice of Deficiency, you may proceed to litigation with the Tax Court, The District Court or the Court of Federal Claims. The Tax Court would accept your timely filed petition even if you did not pay the deficiency in full. However, you will need to cover the tax liability if you plead the District Court or the Court of Federal Claims.
Installment Agreement & Offer in Compromise
If you are unable to cover your tax liability or deficiency in full within 120 days, we would recommend you to consider filing an installment agreement with the IRS. The agreement allows you to pay taxes due over a 72-month period. A downside of the installment is the fact that penalties and interest continue to accrue until the liability is covered in full.
An Offer in Compromise is a request to settle your tax debts for less than the full amount you owe. Though many tax practitioners promote the Office in Compromise as a common option, you should note that you must have a strong and valid reason to establish your eligibility to compromise. Otherwise, the tax administration will reject your offer and you will forfeit your filing fees.
An Offer in Compromise will be accepted by the IRS if there is doubt as to the liability, a doubt of collectibility or in very limited circumstances to promote a sound, fair and efficient tax system. The assessment of any option requires careful and thorough examination of all facts and circumstances surrounding your particular situation.
International Tax Representation Services
We assist resident and non-resident taxpayers from the early stage of an examination till collection due process. Our international tax representation services include
- Assistance and representation of your rights during audits, examinations, appeals, and collection due process
- Submission of refund claims, including abatement of penalties and interest on Form 843
- Tax appeals and recommendations concerning settlements with the Appeals Office
- Preparation of Installment Agreement and Offer in Compromise
- Streamlined Foreign Offshore Procedure and voluntary disclosures of foreign assets
- Release of tax levy, lien, or garnishment
- Preparation and filing of corrected and amended tax returns
Should you wish to register for our tax resolution services, you may do so at any time. Did not find what you were looking for? Ask your questions and get a free quote with more information about how we can assist you further. You may also contact us directly.