One of the primary roles of the Internal Revenue Service (IRS) is to audit individuals and businesses, ensuring the information included in their tax returns is accurate. When agents find discrepancies, it can lead to tax disputes.
You have some options when it comes to how you resolve a tax issue—some opt to go through tax court, others choose an administrative appeal. With the help of a dedicated tax attorney, you could select the best option for resolving your income or deduction dispute. Instead of handling this process alone, consider consulting a Baltimore administrative appeals lawyer.
Instead of pursuing litigation in tax court, you have the option to file an appeal within the IRS, via a system designed to resolve disputes between taxpayers and the federal government. Unlike other types of administrative systems with multiple appellate levels, the IRS offers only one option for appealing a decision. If you disagree with the outcome of your dispute, your only option is to take your case to the local IRS appeals office.
There are two different ways to approach this process: a small case request or a formal protest. Small case requests—as the name suggests—are for disputes over a tax obligation of $25,000 or less. This amount includes both the principal owed and any applicable penalties.
Disputes over larger amounts of money usually go through the formal written protest process. The notice submitted to the IRS should include an array of information, including the tax period involved, a list of issues you disagree with, and the authority you are citing for your argument. In Baltimore, an administrative appeals attorney could help you compile relevant details for this process.
As a Baltimore attorney could tell you, there are several benefits to the administrative appeals process. In most situations, it is less expensive than pursuing litigation through tax courts, and the process is typically faster due to the informal nature of the appeals system. While strict rules apply in court, appeals are often a battle of documents and forms.
There are also privacy issues to consider. When you take your case to court, the dispute with the federal government is part of the public record. That is not the case during an administrative appeal, which allows you to maintain a degree of privacy while still defending yourself.
Although the appeals system is a worthwhile option for most taxpayers, there are some downsides worth considering. One of the most significant drawbacks is that it allows your dispute to remain open and under scrutiny during the ongoing process, with the possibility of additional issues arising. There is also the potential for—or at least the appearance of—bias in favor of the IRS, given that the appeals are handled in-house.
Ultimately, only you can decide if filing an appeal is in your best interest. To help you consider the costs and risks associated with this approach, a Baltimore lawyer experienced in administrative appeals could answer your questions about an appeal or other options.
The appeals process could be the best solution for you, especially given that you have the right to hire an attorney. As the only criminal tax lawyer in the area, Whiteford Tax Defense could help you challenge an unfair tax decision and protect your privacy.
If you are considering an appeal, now is the ideal time to take action. Reach out to a Baltimore administrative appeals lawyer today for a private consultation.