When an individual or business has unpaid taxes that they need to remit to the government, they may receive a letter in the mail called a Notice of Determination. This letter gives them notice of what they owe, with the option of either paying it or potentially appealing the order if they believe there was an error. A knowledgeable unpaid taxes lawyer could analyze your situation to determine if it might be worth challenging an IRS Notice of Determination in Washington DC or if it is in your best interest to adhere to the order as given.
Missing IRS deadlines can eliminate certain options to resolve tax debt. If a taxpayer in Washington DC misses a 30-day Notice of Determination letter following an IRS audit or a collection due process hearing, that could force them to go to tax court. The same thing could happen if a taxpayer does not reply to a Notice of Deficiency letter within the 90-day period: their proposed assessment will be finalized without the option of challenging it. By responding within that 90-day period, a taxpayer could go to U.S. Tax Court to challenge the proposed liability without having to make a payment until the tax debt has been either approved or denied entirely.
The Notice itself should clearly dictate whether it is purely informational or requires a response. A letter requiring a response will mention a deadline, a balance that is due, proposed adjustments, and potentially a request for audit meetings, among other things. However, unless the recipient of the letter is well-versed in tax law, the way the IRS constructs these letters could potentially lead to confusion. It does not hurt to call a tax lawyer to clarify if any official response is needed.
DC taxpayers can avoid miscommunications by carefully reading all correspondence from the IRS. It is not uncommon for a taxpayer to move their primary residence and fail to update the IRS, causing them to miss a notice that was mailed to the wrong home. That can cause an otherwise-fixable situation to quickly spiral out of control, so it is critical that a person ensures their new residence is on file.
If the taxpayer is trying to resolve a controversy on their own, and they are communicating with the IRS before hiring an attorney, they should write down the name, ID number, and phone number of the person that they spoke with at the IRS so that a tax attorney could follow up and gain a clear understanding of what happened before they were retained.
It is possible for IRS Notices to be incorrect, especially when the letters are computer-generated. The most common example of an error is when the IRS requests payment but the payment was already in the mail at the time. Another example is that the IRS may request a tax return to be submitted but the taxpayer may have already filed it before that automated letter came out. Some of these situations can be avoided by filing electronically whenever possible, which also allows all correspondence with the IRS to be tracked.
It is important that a local taxpayer understands the issue at hand in an IRS Notice of Determination. If the IRS was correct in issuing the Notice, there may be no point in challenging the underlying amount due, which could take up valuable time and resources. It may be in their best interest to pay the debt, potentially with the use of an installment agreement or Offer in Compromise.
Although Notices of Determination are considered final, there is still an opportunity to appeal a decision. For those with large tax obligations who require an alternative collection plan or who seek to challenge the validity, you can call Pontius Tax Law upon receipt of an IRS Notice of Determination in Washington DC.