Tax controversies can involve proposed tax assessments, tax collection actions by the IRS, or other IRS actions. After an IRS audit is conducted, the revenue agent may issue a statutory notice of deficiency. This notice provides an outline of the items that the IRS revenue agent has adjusted. However, you may not agree with these proposed adjustments. Once the IRS issues a final notice, taxpayers can generally seek a remedy from the courts. You are entitled to file a Tax Court petition if you have received:
- A notice of deficiency, or
- A notice of determination.
The Tax Court has jurisdiction to decide a variety of types of disputes. Moreover, the Tax Court can be an effective method of resolving disputes as the taxpayer is not required to full pay the tax before disputing it with the Tax Court. If you disagree with the results of an IRS audit, you can dispute the results in Tax Court. Once a taxpayer has exhausted his or her administrative appeal rights and still disagrees with the IRS, the IRS will issue a notice of deficiency to the taxpayer’s last known address. The notice of deficiency will outline the adjustments to the taxpayer’s tax return and will state that the taxpayer has 90 days to file a Tax Court petition. This 90 day deadline is a hard deadline that cannot be extended.
CDP Rights and Litigation
In some circumstances, collection actions taken by the IRS can be disputed in Tax Court as well. If you have received a Collection Due Process notice, you can file a collection due process appeal. If you disagree with the appeals officer’s determination, you will receive a notice of determination, which will grant you the same appeal rights as a notice of deficiency to file a Tax Court petition within 90 days of the date of the notice of determination.
Is the Statutory Notice of Deficiency Valid?
You should review the notice of deficiency to ensure that there are no jurisdictional defects. If the notice is not valid as a result of some defect, the IRS may not be able to assess the proposed deficiency. A tax attorney should consider the following factors in reviewing the validity of a statutory notice include:
- That the statutory notice was sent to the proper party and to the last-known address. See CCDM 18.104.22.168, Motions to Dismiss for Lack of Jurisdiction, and CCDM 22.214.171.124, Timeliness.
- If an individual petitioner is incompetent or deceased, that the person to whom the notice was sent properly qualifies as the representative.
- If the addressee is a transferee, that transferee liability is properly asserted.
- If the addressee is a corporation, that the notice is properly addressed, that the corporation is still in existence, and that the officers have the authority to institute suit.
- That the statutory notice was sent to the petitioner by certified mail or registered mail.
- If the addressee is an estate or a trust, that the notice is properly addressed, that the estate or trust is still in existence, and that the representative has the authority to institute suit.
Contact a Tax Attorney
If you have received a notice of deficiency or a notice of determination, contact a tax attorney today for a free consultation.Free Consultation