How to Make a Settlement With the IRS
Examine all correspondence from the IRS., Calculate or Recalculate your taxes., Retain a tax professional., Respond to the IRS., Determine next steps.
Step-by-Step Guide
-
Step 1: Examine all correspondence from the IRS.
If you received a letter from the IRS disputing your filed tax return or you received a notice from the IRS stating that you failed to file a tax return and they calculated your taxes for you,it is imperative that you assess your tax liability. -
Step 2: Calculate or Recalculate your taxes.
If the IRS disputed your tax calculation, its letter should also specify the basis on which the IRS is making its claim.
Carefully review the disputed tax return, paying special attention to the IRS’ proposed changes.
If you did not file taxes, you should first calculate your tax liability by filling out the appropriate tax return and comparing your return to the IRS’ claims. , If a tax professional prepared your original tax return contact them to discuss the IRS’ concern.
They may be able to provide a quick response to the IRS or handle the matter as part of their original tax preparation service.
If you prepared your own taxes, you should still consider retaining a tax professional.
They may be able to quickly assess whether the IRS is correct and if there are any other ways that you could reduce your tax liability such as filing an amended tax return. , If you choose to handle the negotiation yourself and you dispute some or all of the IRS’ calculations, respond to the IRS within the time frame set forth in their letter or notice.
If you did not file a tax return originally, you may be required to first file a tax return and file a petition in tax court.If the IRS sent you a letter proposing changes to your tax return, you can dispute these changes in a letter that includes: a statement that you disagree with the IRS’ proposed changes; the basis for your disagreement; any documentation supporting your position; the control number or unique identifier that the IRS assigned to your case.
It is imperative that you respond to the IRS in the manner that they specify in their correspondence to you and within the time frame they set forth.
Failure to do so may result in additional penalties. , If the IRS agrees with your argument and determines that you do not owe any taxes, then the matter should be closed.
If however, the IRS maintains and you agree that you owe taxes then you should attempt to reduce your tax liability. -
Step 3: Retain a tax professional.
-
Step 4: Respond to the IRS.
-
Step 5: Determine next steps.
Detailed Guide
If you received a letter from the IRS disputing your filed tax return or you received a notice from the IRS stating that you failed to file a tax return and they calculated your taxes for you,it is imperative that you assess your tax liability.
If the IRS disputed your tax calculation, its letter should also specify the basis on which the IRS is making its claim.
Carefully review the disputed tax return, paying special attention to the IRS’ proposed changes.
If you did not file taxes, you should first calculate your tax liability by filling out the appropriate tax return and comparing your return to the IRS’ claims. , If a tax professional prepared your original tax return contact them to discuss the IRS’ concern.
They may be able to provide a quick response to the IRS or handle the matter as part of their original tax preparation service.
If you prepared your own taxes, you should still consider retaining a tax professional.
They may be able to quickly assess whether the IRS is correct and if there are any other ways that you could reduce your tax liability such as filing an amended tax return. , If you choose to handle the negotiation yourself and you dispute some or all of the IRS’ calculations, respond to the IRS within the time frame set forth in their letter or notice.
If you did not file a tax return originally, you may be required to first file a tax return and file a petition in tax court.If the IRS sent you a letter proposing changes to your tax return, you can dispute these changes in a letter that includes: a statement that you disagree with the IRS’ proposed changes; the basis for your disagreement; any documentation supporting your position; the control number or unique identifier that the IRS assigned to your case.
It is imperative that you respond to the IRS in the manner that they specify in their correspondence to you and within the time frame they set forth.
Failure to do so may result in additional penalties. , If the IRS agrees with your argument and determines that you do not owe any taxes, then the matter should be closed.
If however, the IRS maintains and you agree that you owe taxes then you should attempt to reduce your tax liability.
About the Author
Mark Rivera
Enthusiastic about teaching creative arts techniques through clear, step-by-step guides.
Rate This Guide
How helpful was this guide? Click to rate: