William Kunofsky

William Kunofsky

Tuesday, July 19, 2011

Appeals of Estimated Tax Returns

Taxpayers that have not filed tax returns often receive correspondence from the IRS requesting the missing return. Later the taxpayer will receive a letter with an estimated amount of tax for the year that was not filed. once the deadline has passed, the taxpayer is noticed that they now owe tax, penalties, and interest. and have ninety days to file a U.S. Tax Court Petition. This is often called a 90 Day Letter. Many taxpayers stop here and later learn how bad their decision was for their future.
The Tax Court Petition allows the appeals division to review the tax returns that will be prepared. Should appeals not accept the return or require adjustments to the return that are unacceptable there still is the chance of settlement before the trial. Alternatively, the Court could accept the return.
The decision to fix the problem not filing is important. The audit the IRS completed causes consequences that are truly catastrophic. Procedural protections such as statutes of limitation are based upon assessment after the tax return are actually filed with the IRS. Bankruptcy relief requires the filing and assessment of a tax return.
Signing the audit can be considered the equivalent of filing a return.

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