Substantial Compliance: Finding Acceptance With the IRS

A professor can increase overall class scores for extra credit. A police officer is authorized to issue warnings for minor traffic infractions. A judge can allow a defendant to plead guilty to a lesser charge when justice warrants it. These situations involve individuals who have a certain level of authority or power in a particular…

Can Taxpayers Withhold Payment Pending Government Response?

As citizens, we sometimes seek answers from the government, be it information about UFOs or more practical questions such as what provision grants the IRS the right to collect taxes. For years, tax protesters have been asking the latter, only to be met with evasive responses from the IRS. The case of We the People…

Car Dealerships and Cash Reporting Requirements

Cash-based businesses can pose a challenge for the IRS, as they may be susceptible to tax fraud. To address this issue, Section 6050I(a) requires businesses to report any cash payments exceeding $10,000. This provision enables the IRS to track substantial cash payments made to cash-based businesses, and Form 8300 is the designated form for reporting…

IRS Has the Burden of Proof for Items of Income

In tax disputes between taxpayers and the IRS, the burden of proof lies with the IRS to prove that a taxpayer earned more income than reported. The IRS has to have some evidence. These rules are set out in Section 7491, which shifts the burden of proof to the IRS, making it more difficult for…

5 Things to Prepare for an IRS Audit

5 Things To Prepare For An Irs Audit

The IRS audit rate is quite low. But lucky you, you have received an IRS audit notice. Fun stuff. So what do you do? Or what can you do to prepare? There are several things that you might start with. Before getting into those, let’s stop to think about how the IRS audit process. The…

What Are the Chances of Being Audited?

What Are The Chances Of Being Audited?

The fear of being audited by the Internal Revenue Service (“IRS”) looms large for many taxpayers. The IRS releases general statistics regarding audits, but how much do these numbers truly reveal about an individual’s chances of being audited? This article will delve into the most recent IRS statistics, explore their implications, and provide an informed…

IRS Statistics for Audit and Enforcement Rates

Irs Statistics For Audit And Enforcement Rates

While the IRS does not release many of the factors that it uses to identify taxpayers for tax audits, the IRS does release general statistics that can help gauge a taxpayer’s audit potential.  These statistics help answer the question of “what are the chances of being audited?” IRS Audit Rates Looking at the most recent IRS…

The IRS’s New Appeals Arbitration Program

The Irs’s New Appeals Arbitration Program

The IRS Office of Appeals provides a great forum for resolving IRS tax disputes.  While appeals settles a lot of cases, it doesn’t settle them all.  This is where the IRS arbitration program comes in.  It is for those close cases that almost settled, but didn’t.  The IRS recently released Revenue Procedure 2006-44, which sets out…

Tax Attorney Contests IRS Bypass Letter

Texas Tax Attorney Contests Irs Bypass Letter

A taxpayer is entitled to hire a licensed attorney, CPA, or enrolled agent to represent them before the IRS. The taxpayer has a fundamental right to choose their tax advisor. The IRS generally has to accept this choice and work with the tax advisor. The IRS cannot simply ignore the tax advisor. Even to communicate…

IRS Recalculation Doesn’t Justify Abating Interest

Recent Texas Tax Case Is An Example Of Why Taxpayers Should Hire A Tax Attorney

Taxpayers may sometimes request the IRS to recalculate their tax liability, and the IRS may grant such a request, but this does not necessarily mean that the IRS accepts all the tax positions set out or omitted from the return. If the IRS subsequently recalculates the amount of tax due again and increases the amount…