IRS Appeals

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Requesting Records For IRS Appeals

When you sign over a power of attorney, we request your record of account from the IRS. We also, request third party payer transcripts when needed, to see what income information was reported to the IRS. It used to take three days for the IRS to record our power of attorney. It now takes much longer. When they do put it on file on their central authorization file; we can print the records we need, from our computers.

Do You Need Your Individual Master File (IMF) Or Business Master File (BMF), When You File IRS Appeals?

It’s usually not necessary to request your master files from the IRS. If you are going to tax court to prove certain actions were or were not taken by the IRS you may need it. We use the record of account to reconcile returns filed, payments made, and interest and penalty amounts. The record of account includes when liens are filed as well as other transaction information such as credits, statue write offs, offer in compromise filings, bankruptcy, etc. It also shows the date a return was received from taxpayer or made up by the IRS. This is usually enough information to help you resolve your appeal issues. We usually pull these records for the last 10 years to see if there are any errors. So if we are doing IRS audit appeals, collection appeal, offer appeal or penalty, we often get these records. Often the letter the IRS sends the taxpayer is used as the amount owed. These letters are often incomplete. The record of account is the most accurate report.
Occasionally the record of account is not updated for interest and penalties. I once pulled a record of account that had all the transactions on it, but not all the interest and penalties. The revenue officer and I agreed that it needed to be updated. You must make sure the record of account actually reflects that everything is up to date. Do you know what to look for? If not, you could pay more than you owe. You may even incorrectly think that you don’t owe. You don’t want a wage levy on a tax year that you think you don’t owe for, do you? We will check your record of account to see what can be done to benefit you. Penalty Removal Appeals – Form 843 Claim for Refund

Tax Penalty Removal Appeals – Form 843 Claims for Refund

Filing form 843 can remove penalties. One 843 form is filed out per year or individual period. The IRS tends to allow you to remove penalties for the first delinquent year, if it’s the only period owed. Usually they accept most any excuse. The best excuse is to convince them that the delinquency was due to reasonable cause. If they see evidence of willful negligence they won’t remove penalties. It’s important to include the specific wording in your penalty appeal that the IRS is looking for. You may want us to file the penalty appeal for you.

Appealing Failure To File Penalty Code 6551

There are various reasons to appeal the failure to file penalty. Please look up code 6551 in the IRS penalty code list.
Sometimes people send their returns to the wrong address. They paid the tax timely and mailed the returns before the due date. Maybe there were deaths or sickness in the family. Maybe your house was destroyed by fire or flood. Perhaps your attorney gave you bad advice or late information preventing you from filing timely. You should prepare a notarized statement, that explains your reasons.
This penalty is computed at 5% per month, up to 5 months from the date the return was due. The 5% is based on the tax liability owed at the due date of the return. What if you owe on April 15th (assuming no extension was filed), then three months later you pay the full balance and don’t file till 9 months later. You may think that you owe the penalty for only 3 months since it was fully paid. In reality, the IRS charges you the full 5 months, even though there was no balance for two of those months. I have experienced this in my practice more than once. Don’t let yourself lose money by hiring inexperienced tax representatives. The IRS considers this something the taxpayer should have known. They won’t accept the logic that the rules are complicated enough requiring the reliance on professional advice. The IRS will charge the full failure to file penalty of code 6551. You can fight this in appeals or tax court. It’s better to have the knowledge of how the IRS works to avoid IRS problems. You should file and pay on time. If not, respond timely to all IRS letters, notices, and other communication.

Negligence and Substantial Understatement Penalties

IRS Code 6662 and 6664 – How to Appeal
You can be charged late paying and late filing penalties by the IRS. You may also be charged Negligence and Substantial Understatement penalties. They do this when they make a significant tax adjustment to your return or they feel you intentionally disregarded the rules and regulations. You are required to prepare your return accurately. That’s why it’s very costly to have a discount tax chain prepare your return, instead of an experienced CPA firm. The penalties may be huge compared to any savings of tax preparation fees. However, these penalties may be negotiated or appealed more easily then late filing and paying penalties. You should also be aware of your collection rights and the right to file a collection appeal. Our appeals blog has more information that might help you.

Our CPA firm may remove penalties prior to an appeal by…
1. Reviewing the IRS penalty codes.
2. Use affidavits to show there was no negligence or intentional disregard of the IRS preparation and filing rules.

Using Affidavits For Appeals

You may want to try to make the burden of proof the responsibility of the IRS. You can do this by signing an affidavit in front of a notary. Sometimes it doesn’t have that much appeal power, but it never hurts. You should make sure you list the facts and your conclusions in as explicit detail as possible, in your affidavits you use for appeals.

So why risk your money and assets with a non-professionally licensed company, regardless of the unregulated claims stated on their website.

Hire a licensed professional CPA firm with many years of tax and audit representation experience, such as ours. A CPA firm must adhere to the highest standards of practice. Our experience means you will not suffer tax audits because of preparers who just put information on tax returns just to clear the alerts.

• If you are considering hiring us, call Joe Mastriano, CPA 713-774-4467.