Get a Tax Bill That’s WRong?
If you receive an IRS bill you believe is incorrect, do not assume your only options are to pay it or ignore it. The right response depends on why the IRS says you owe money, how it assessed the liability, and where the case is in the IRS collection or examination process.
A disputed IRS balance may involve a reporting mismatch, audit adjustment, missing payment, unprocessed return, disallowed deduction or credit, penalty, substitute-for-return assessment, or another account problem. The first step is identifying exactly what the IRS changed and which deadline applies.
Why Would an IRS Tax Bill Be Wrong?
IRS notices are generated from tax returns, third-party information, audit findings, payment records, and IRS account processing. Errors or disagreements can arise for many reasons:
An IRS notice showing a balance due does not necessarily mean the IRS’s conclusion is correct. But the taxpayer still needs to respond using the procedure tied to that particular notice.
Check the Tax Year and Notice
Start with the notice itself. Identify the notice or letter number, tax year, balance, proposed adjustment, response deadline, and the IRS office that issued it.
Different IRS notices create different rights. A CP2000 underreporter notice is different from an audit report. A 30-day examination letter is different from a Statutory Notice of Deficiency. A collection notice is different from a final levy notice with Collection Due Process rights.
Do not assume that every IRS bill can be disputed using the same form or procedure.
Compare the IRS Information With Your Return
Once you know what the IRS is questioning, compare the notice with the filed return and your records. Look at the exact income item, deduction, credit, payment, or adjustment involved.
If the dispute involves income reported by a third party, compare Forms W-2, 1099, brokerage statements, retirement distributions, and payment-processor records with the return. If the IRS assessed additional tax after an audit, review the examination report and identify each adjustment you disagree with.
A focused response tied to the specific disputed item is usually more effective than broadly stating that the entire IRS bill is wrong.
Disputing an IRS Tax Assessment?
If the IRS claims you owe additional tax and you believe the assessment is incorrect, Todd S. Unger can review the notice, tax history, disputed adjustments, and supporting records to help determine which response or appeal procedure applies.
Gather Supporting Documents
The documents you need depend on why the IRS says you owe additional tax. Gather records that directly support the disputed issue:
Keep copies of everything you send to the IRS. When a deadline is involved, preserve proof of submission or mailing.
Understand Your Response Deadline
Deadlines can determine which dispute options remain available. Some IRS examination letters allow you to request an administrative appeal. A Statutory Notice of Deficiency generally gives a taxpayer a limited period to petition the United States Tax Court without first paying the disputed tax.
Collection notices may create different deadlines and appeal rights. If a notice involves a proposed levy or federal tax lien, separate Collection Due Process procedures may apply.
Use the deadline printed on the notice and follow the instructions for that specific letter. Do not rely on a deadline from another IRS notice or an online example.
IRS Appeals and Other Dispute Procedures
No single dispute procedure applies to every IRS bill. The correct path depends on how and when the tax was assessed:
If the IRS issues a notice providing appeal rights before assessment, a taxpayer may be able to request review by the IRS Independent Office of Appeals.
If an audit assessment is already final and relevant information was not previously considered, audit reconsideration may be worth evaluating in qualifying cases.
Certain final levy and federal tax lien notices may create separate rights to a Collection Due Process hearing.
If the taxpayer has already paid the disputed tax, they may need to evaluate an amended return, refund claim, or other refund procedure instead of an unpaid-assessment remedy.
The IRS Independent Office of Appeals is separate from the IRS office that initially reviewed the case and considers many examination and collection disputes.
When to Contact a Tax Attorney
Some IRS errors can be corrected with a straightforward response. Others involve disputed income, business deductions, audit findings, multiple tax years, penalties, collection action, or legal deadlines that can materially affect the taxpayer’s rights.
Legal review may be especially helpful when:
Todd S. Unger helps taxpayers review disputed IRS assessments, determine which procedural options remain available, organize supporting records, and prepare a focused response.
Disputing an IRS Tax Assessment?
Before paying a disputed assessment or allowing an IRS deadline to pass, review the notice, tax year, assessment history, and available records. Todd S. Unger can help determine the appropriate next step.
