Each year it is estimated that over 20 million taxpayers have a tax issue or problem with the IRS. And the chances are, the path to resolving that tax problem is covered in the Tax Problems and Solutions Handbook.
Working with the IRS can be complicated and frustrating – even for the most knowledgeable tax professional. The rules in resolving tax problems often appear unclear and they change often, leaving tax professionals and taxpayers with no line-of-sight to resolving their tax problems. The Handbook provides the most current practical know-how to convey that line-of-sight.
The Handbook will provide direction on how to resolve the most common IRS problems for individuals. The first section provides guidance on the most common post-filing actions: contacting and working with the IRS to obtain information and helping tax professionals practice effectively before the IRS. The remaining sections of the Handbook focus on each of the major tax problem categories: audits/underreported notices, collection issues, penalties, unfiled returns, and spousal issues. The issues in these categories constitute most of the problems for individual taxpayers. The book provides solutions to these problems.
Practically, data shows that most taxpayers and their tax professionals will perform one of the following post-filing actions:
Contact the IRS to get a tax history and information related to a tax problem.
Respond to a CP2000 (underreporter) notice or mail audit inquiry.
Evaluate and obtain a collection alternative, such as a payment plan or an extension to pay.
Request penalty abatement for the failure to file and/or failure to pay penalty.
Research source documents and prepare, file, and process a late, past-due tax return.
This Handbook covers these most common issues extensively, providing the taxpayer and tax professional with the background, guidance, steps, and practical resources needed to resolve the issue quickly, effectively, and with the best outcome suited to the taxpayer’s facts and circumstances.
The IRS is constantly changing procedures, compliance focus areas, and solutions for taxpayers. This edition of the Handbook provides the most up-to-date solutions for the most common problems facing taxpayers.
Almost all tax problems are solved administratively within the IRS. That is, taxpayers and tax professionals work within the IRS compliance unit and/or IRS Appeals from beginning to end. Very few cases end up in the courts.
To work effectively with the IRS, the taxpayer and tax professional must understand how the IRS operates administratively. In the Handbook, most of the references cited are not to tax law (i.e., the Internal Revenue Code). Most citations reference IRS procedures found in its Internal Revenue Manual (IRM). The IRM lays out how the IRS works and includes legal citations. But most importantly, knowledge of the IRM contains the route to obtaining information from the IRS and resolving a tax problem. As such, IRM knowledge is essential to resolving most tax problems efficiently and effectively.
When approaching a tax problem or IRS notice, the taxpayer/tax professional should first review the particular chapter’s “Quick Chart” to obtain a baseline set of practical knowledge and an understanding of what to expect for each specific tax problem. With this baseline knowledge, the taxpayer/tax professional can proceed to the most appropriate section(s) addressing the particular problem area(s) with accompanying solutions(s). Each section will provide an overview of the issue, possible solutions, and include steps to be taken to achieve that solution. At the end of most sections are the forms and templates needed to execute the solution. Practice tips provide insight and what to expect when addressing the issue.
The Tax Problems and Solution Handbook is based on the author’s practical experience in resolving thousands of tax problem cases with the IRS. From this experience, one truth is clear: the IRS is not an easy government agency to navigate, especially when trying to resolve a tax problem. Taxpayers and tax professionals should not expect to resolve a problem immediately. In fact, some complicated tax problems can take over a year to resolve. This Handbook will set the expectations of the resolution time based on the solution(s) selected. The Handbook will also provide the steps and tips to most efficiently resolve the problem.
To this end, the Tax Problems and Solutions Handbook enables both taxpayers and tax professionals to address the most common post-filing issues. The reality is that most tax problem-solving (especially complex problems) will be done by tax professionals.
Statistics show that most people, including tax professionals, do not like to work with the IRS after filing. In fact, almost two-thirds of taxpayers fear dealing with the IRS after filing. Based on the author’s experience from years of working for the IRS and many more years helping taxpayers with tax problems, he is certain that most problems can be resolved. The Handbook demonstrates how to resolve the tax problem and get into good standing with the IRS.
Table of Contents
Chapter 1 IRS Practice: Working with the IRS After Filing
Chapter 2 IRS Audits and Underreporter Notices
Chapter 3 IRS Collection
Chapter 4 IRS Penalties and Penalty Relief
Chapter 5 IRS Unfiled and Past-Due Returns
Chapter 6 Spousal Issues