Process of Appealing To U.S. Tax Court

Under normal audit procedures, the IRS issues a 30-day letter, giving a taxpayer 30 days to file a protest and request an Appeals hearing. On the taxpayer’s failure to request a hearing or following an Appeals hearing, the Service issues a 90-day letter (officially called a “Notice Of Deficiency”), giving the taxpayer 90 days to file a Tax Court petition before collection proceedings begin.

With the reduction in the number of IRS audits and a reliance on computer matching, some taxpayers are facing automatic computer-generated 90-day letters, without first receiving a 30-day letter. IRS personnel call this practice, “smokeout” whereby the 90 days will toll around the time the IRS finally determines whether the tax is due, so that it can institute collection proceedings without delay.

While it is possible that writing letters and contacting the IRS could resolve disputes before the IRS issues a 90-day letter, you do not want to count on fully resolving the dispute within the 90-day period after the Notice Of Deficiency is issued. So in those cases, you will want to preserve your appeals rights by filing a petition in Tax Court.

Once a taxpayer files a Tax Court petition, IRS District Counsel has jurisdiction. Usually about six weeks after the Petition is filed, the IRS District Counsel will respond with a written Answer. Counsel then refers the case to the IRS Appeals Office to determine whether Appeals can settle it. If you are represented by counsel, Appeals and District Counsel will deal directly with your representative who must be admitted to practice in Tax Court.

Scam Artists Now Using The Tax Court Docket As A Means To Scam Taxpayers

For those taxpayers who are unrepresented by counsel and file a petition in the U.S. Tax Court, scam artists are now scouring the Tax Court docket (which is accessible by the public) to obtain information on taxpayers having disputes with the IRS and then calling the taxpayer before the taxpayer even receives the Answer that was filed by IRS District Counsel.

These callers may demand money or may say you have a refund due and try to trick you into sharing private information. These con artists can sound convincing when they call. Scammers use fake names and IRS badge numbers. They generally use common names and surnames to identify themselves. They may know a lot about you and may be able to recite the last four digits of a victim’s Social Security Number and your place of business. They usually alter the caller ID to make it look like the IRS is calling – many times they will use a Washington, D.C. area code. The area codes for the Washington D.C. area are 202, 301 and 703. They will also background noise of other calls being conducted to mimic a call site. If you don’t answer, they often leave an “urgent” callback request and if they have your email address, will send bogus IRS emails to some victims to support their bogus calls. After threatening victims with jail time or driver’s license revocation, scammers hang up and others soon call back pretending to be from the local police or DMV, and the caller ID supports their claim.

How Do You Recognize That This Call Is Fake?

Here are five things the scammers often do but the IRS will not do. Any one of these five things is a tell-tale sign of a scam. The IRS will never:

1. Call you about taxes you owe without first mailing you an official notice.

2. Demand that you pay taxes without giving you the opportunity to question or appeal the amount they say you owe.

3. Require you to use a specific payment method for your taxes, such as a prepaid debit card.

4. Ask for credit or debit card numbers over the phone.

5. Threaten to bring in local police or other law-enforcement groups to have you arrested for not paying.

So What Should You Do?

If you get a phone call from someone claiming to be from the IRS and asking for money, here’s what you should do:

If you know you don’t owe taxes or have no reason to believe that you do, report the incident to the Treasury Inspector General for Tax Administration at 1.800.366.4484.

And if you do owe taxes and you have not already resolved this with the IRS, then that is where we come in. Tax problems are usually a serious matter and must be handled appropriately so it’s important to that you’ve hired the best lawyer for your particular situation. Connect with me on TaxConnections.

Original Post By:  Jeffrey Kahn