Anatomy of a Federal Tax Controversy
Step one: The IRS conducts a tax audit. A tax audit is an examination of your income and expenses to ensure that you correctly reported your tax liability. All types of tax returns are subject to audit, including income, business, estate, and gift tax returns. Step two: The 30-day letter If a revenue agent determines […]
Definitions of commonly used tax terms
Deficiency: A taxpayer’s correct liability, as determined by the IRS, less the amount reported on the return. Assessment: In order for the IRS to use administrative procedures to collect the tax owed, it must first “assess” it. Assessment means formally recording the tax liability. Statute of limitations Collection: In theory, the IRS has only ten […]