When you submit your federal income tax return to the Internal Revenue Service (IRS) each year, obviously the idea is for you to submit an accurate tax return. Whether you have calculated your federal income tax yourself or hired a tax professional to prepare your tax return—such as a Certified Public Accountant (CPA) or tax attorney—the income and deductions on the tax return should reflect actual events and be supported by various documentation. This supporting documentation can include your W-2, statements from your bank or mortgage company reflecting interest paid or earned, logs you have maintained of business mileage, contribution forms from charitable organizations, and similar documents. While you do not have to include this supporting documentation when you file your tax return, it should still be used as the basis for the numbers and other information submitted on your tax return, and you should retain copies of that supporting documentation.
When the IRS receives your federal income tax return, the IRS performs several basic checks and reviews of the information on the return before accepting the return and beginning to process your refund (assuming a refund is due to you). This review includes the following:
- Ensuring the names and Social Security Numbers on the tax return match and have not been used on other returns,
- Ensuring calculations—whether addition or subtraction—are accurate and that the various deductions and exemptions are valid for the taxpayer’s situation for the current tax year, and
- Ensuring common indicators of fraud are not present.
In addition to the above checks performed before accepting a return in a given tax year, the IRS can perform a more detailed review for audit purposes. The IRS can review federal income tax returns in detail for up to three years, or for up to six years if the IRS believes a serious mistake has been made on a return, to determine if a formal audit of the return should be conducted.
In either of the above processes, whether the normal review done on all returns or the more detailed review conducted in selecting federal income tax returns for an audit and conducting that audit, the IRS may make changes on your return that may result in you owing more tax. It is also possible that the IRS will make a mistake when determining your return is not accurate, resulting in a miscalculation of the tax debt you owe.
If the IRS has legitimately miscalculated your tax debt, there are two main causes. First, it can be a simple error. Second, it can be because the IRS did not receive sufficient support to allow a deduction, exemption, or other item on your return. In either case, you should take similar steps to resolve the matter.
Have a tax attorney review your return and any information provided by the IRS as to why they believe your return is not accurate. If the tax attorney believes the IRS has made a mistake, you should make use of the appeals process for tax disputes. The appeals process is handled by an independent body from the IRS with the goal of attempting to resolve tax disputes in a fair and unbiased manner.
Additional information about appealing your taxes is available on the IRS web site at http://www.irs.gov/individuals/content/0,,id=98196,00.html .
How can I get help in reviewing my situation and filing an appeal if it is right for me?
If you complete the short form found below, a tax attorney who is knowledgeable about federal income tax returns and the processes for appealing IRS decisions that may be in error will contact you. The tax attorney can have an initial discuss about your situation free of charge and without further obligation to you, and you can rest assured that nothing you share with the tax attorney will be discussed with anyone else, including the IRS. Therefore, you should take this opportunity today to get help in determining if an error has been made by the IRS on your tax return and taking the steps to be sure you pay only the minimum tax you can.
- What are the top five steps to take if you owe tax debt? (taxlawhome.com)
Mark has been a contributor to legal web sites related to bankruptcy, tax, and criminal law since 2011. He has an Accounting degree from Texas A&M University.