IRS Tax Tip 2020-34, March 11, 2020
When the IRS makes a determination about someone's tax return, that person can challenge the IRS's decision. In fact, the taxpayer has a right to do so. This is one of ten rights laid out in the Taxpayer Bill of Rights. They also have the right for that challenge to be heard by the agency.
This means taxpayers have the right to:
- Object to formal IRS actions or proposed actions and provide additional documentation in their response.
- Expect the IRS to consider their timely objections and documentation promptly and fairly.
- Receive a response if the IRS does not agree with them.
When a taxpayer does not agree with the IRS, they should not only know their rights, but also what to expect. Here are some situations a taxpayer might experience:
- A math or clerical error on their tax return. If the IRS sends a notice about a math or clerical error on their tax return, taxpayers have 60 days to reply if they disagree. Taxpayers should provide copies of any records to help correct the error. They can also call the number on the notice or bill for help.
- If the IRS agrees. They will make the necessary adjustments to the account and send a corrected notice.
- If the IRS disagrees. The agency will send a notice proposing a tax adjustment. This is called a statutory notice of deficiency. It gives the taxpayer the right to challenge it in the United States Tax Court before paying it. They have 90 days from the date of the notice to respond. They have 150 days if the notice is addressed outside the U.S. The taxpayer information webpage provides more information about the United States Tax Court.
- Audit. If a taxpayer submits documentation or objects during a return examination or audit, and the IRS disagrees with them, the agency will issue a statutory notice of deficiency. This notice will explain why the IRS is increasing their tax. The taxpayer may then petition the U.S. Tax Court before paying the tax.
- Levy or Lien. If the IRS notifies a taxpayer of plans to levy their bank account or other property, the taxpayer can generally request a hearing before the Office of Appeals. In most cases, the taxpayer can also appeal the proposed or actual filing of a notice of federal tax lien.