If you are like countless other Americans, you may not realize that you have a legal right to appeal a decision of or tax assessment by the Internal Revenue Service. In fact, the ability to appeal an IRS decision in an independent forum is one of the fundamental provisions of the Taxpayer Bill of Rights, a collection of 10 privileges afforded taxpayers, including the rights to:
Wells Fargo & Co. filed a federal case concerning refunds in interest payments from companies with which it had merged. The appeals court recently ruled on the case in a partial win for the banking company. What does this have to do with you?
Individuals can rollover a traditional Individual Retirement Account tax-free one time per year. Does that apply on an IRA-by-IRA basis or is it an aggregate rule?
For years, various consultants and spinmeisters have been pushing the notion of “doing more with less.”
Independent advocates are supposed to call them as they see them. They are not beholden to a certain agency or institution; they seek, rather, to make that institution and its stakeholders function more effectively, in ways that reflect the institution's founding values.
While sorting through their mail this year, a number of Southern California residents have probably had their hearts skip a beat as they discovered a letter from the Internal Revenue Service. Perhaps it was a request for information, or perhaps it was the dreaded notice of deficiency, which is the herald of tax litigation. Whatever the contents, a communication from the IRS rarely fails to induce anxiety.
There is a current division among states over whether to create an independent state tax court system. Such courts hear tax disputes exclusively, replacing the administrative review process, which is the method used in California and 20 other states. Twenty-seven states currently have an independent tax court, although nine of those do not require employees to be experts in tax law.
California residents know our state's budget deficit troubles all too well. While California's deficit is quite large, other states are experiencing problems similar in kind, though much smaller in degree. Under pressure from some constituents not to raise taxes, some state governments are instead relying on increased tax enforcement to gather much needed revenue.
Some California taxpayers with significant tax debts may have entered into--or contemplated entering into--an offer in compromise with the Internal Revenue Service. An OIC is the exclusive way for taxpayers to satisfy their debts with the IRS for less than the total amount owed. But the amount offered to settle the debt and any additional terms that become part of the agreement are vitally important. Taxpayers must analyze very closely exactly what they agree to, otherwise they could face unintended consequences.
Two weeks ago we discussed the bankruptcy and legal troubles of TaxMasters, a national tax firm. That blog post noted that the company had settled a lawsuit filed by one state attorney general, but that it still faced another. That other suit came to a conclusion last week when a jury in the company's home state found that its practices repeatedly contravened the state's Deceptive Practices Act.