When the IRS makes a determination about someone's tax return, that person has the right to challenge the IRS's decision. This is one of ten fundamental rights laid out in the Taxpayer Bill of Rights. Taxpayers also have the right for any challenge to be heard by the agency. This means taxpayers have the right to:
Object to formal IRS actions or proposed actions and provide additional documentation in their response;
Expect the IRS to consider their timely objections and documentation promptly and fairly; and
Receive a response if the IRS does not agree with them.
When a taxpayer does not agree with the IRS, they should not only know their rights, but also what to expect. Here are some situations a taxpayer might experience:
A math or clerical error on their tax return.
If the IRS sends a notice about a math or clerical error on a tax return, taxpayers have 60 days to reply if they disagree with the notice. Taxpayers should provide copies of any records to help correct the error or substantiate the amount reported. Taxpayers can also call the number listed on the notice or bill for additional assistance.
If the IRS agrees, it will make the necessary adjustments to the account and send a corrected notice.
If the IRS disagrees, it will send a notice proposing a tax adjustment. This is called a statutory notice of deficiency. It gives the taxpayer the right to challenge the proposed tax adjustment in the United States Tax Court before paying it. Taxpayers have 90 days (or 150 days if the notice is addressed outside the United States) from the date of the notice to respond.
If a taxpayer submits documentation or objects during a tax return examination or audit, and the IRS disagrees with them, the agency will issue a statutory notice of deficiency. This notice will explain why the IRS is increasing the tax owed. The taxpayer may then petition the U.S. Tax Court before paying the tax, or alternatively, pay the tax and file a claim for refund in federal court.
Levy or Lien.
If the IRS notifies a taxpayer of plans to levy their bank account or other property, the taxpayer can generally request a hearing before the Independent Office of Appeals. In most cases, the taxpayer can also appeal the proposed or actual filing of a notice of federal tax lien.
For more information, see the following resources:
IRS Tax Tip 2020-34 #IRSTaxTip