IRS Assessments Explained

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IRS Assessments Explained

Urgent Tax Services assists individuals and businesses dealing with tax audits and tax collection issues. It is very common for clients presenting several IRS letters received which they have ignored for some time. Therefore, we feel it is very important to educate the public regarding IRS steps for collections.

IRS Assessment Letters

The first letter sent to an individual is a CP2000 notice of Proposed Changes to your tax liability. If you disagree to the changes, you should send in an explanation along with documents supporting your claim. It is always worth analyzing all the details of any tax notice. If you feel that you need help, consult a tax professional right away. Notice CP-2000 explains in great detail the different amount listed on your original tax return and the amount corrected by the IRS.  All tax deficiency notices inform the recipient the income tax amount, along with any penalties and interest due. In addition, it provides the necessary steps resolving the tax debt and avoid IRS collections.

Tax Assessment Extension

Assessment statutes of limitations generally limit the time the Government  has to make tax assessments within three years after a return is due or filed, whichever is later. The IRS cannot assess additional tax after the time for assessment has expired under any statute of limitations. However, no deadline applies where the IRS can establish that a taxpayer has filed a false or fraudulent return. The IRS may request that you extend the assessment statute of limitations. This additional time allows you to provide further documentation to support your position. However, it might also be for your disadvantage to extend the time for the IRS to audit your books and records. One possible solution is to extend only certain parts of your tax return. The procedures for restricted consents are found in Rev. Proc. 68-31, as modified by Rev. Proc. 77-6. Examiners tend to not like restricted consents because the restrictive language must be approved by certain Service officials, necessitating procedures that result in delays. Such consents may not be obtained until examinations have been completed and the examination reports have been prepared. Restricted consents are normally limited to two issues.


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