What kinds of tax disputes can a person have with the IRS?

Tax disputes with the IRS most commonly arise in two settings.  The first is when the IRS determines that a person owes more tax than he or she reported on his or her tax return.  This additional amount of tax is called a deficiency.  The IRS provides individuals with several different levels of administrative review to challenge its deficiency determinations.  If the dispute involving the IRS determination of a deficiency cannot be resolved administratively, individuals can challenge the determination in the United States Tax Court, the Federal District Court, or the United States Court of Federal Claims.

The second setting is where there is no dispute about the amount of tax a person owes, but the IRS is seeking to collect the tax owed by seizing assets or foreclosing liens it has filed against specific property belonging to that person.  The IRS tries to resolve collection disputes administratively to avoid having to pursue involuntary collection action against a person’s assets, especially if the activities of an ongoing business may be placed in jeopardy.  The administrative resolution of collection disputes is generally at the discretion of the IRS, making it essential to have the guidance of a person with expertise in this area.

Posted in: Taxation Information