Top 10 Taxpayer Bill of Rights: #6 Right to Finality

11:09 AM Jamaal Solomon 0 Comments Category :

Finality sounds so damn depressing but it when it comes to your tax debt, it is the best word to know! Most people avoid communicating with the IRS because they believe that their tax debt has no end. The good news is just like life, your tax debt has an end date too. However, you must learn the basic rules to get the clock started. As I always preach, don't be scared to seek professional help. You know that nothing dealing with taxes are simple. There is help for every budget from $0 to $100,000. Don't be scared to deal with your tax issues. This post deals with your right to finality. Learn straight from the IRS about your rights. There is hope but you can't be lazy! Take control of your situation and know your rights.

A list of your rights as a taxpayer and IRS obligations to protect them can be found in IRS Publication 1, Your Rights as a Taxpayer.

It includes The Right to Finality.

Taxpayers have the right to know the maximum amount of time they have to challenge the IRS’s position as well as the maximum amount of time the IRS has to audit a particular tax year or collect a tax debt. Taxpayers have the right to know when the IRS has finished an audit.

What you can expect:
  • The IRS generally has three years from the date you file your return to assess any additional tax for that tax year. There are some limited exceptions to the three-year rule. For example, if you fail to file a return or file a false or fraudulent return, the IRS has an unlimited amount of time to assess tax for that tax year.
  • The IRS generally has 10 years from the assessment date to collect unpaid taxes from you. This 10-year period cannot be extended unless you are entering into an installment agreement or unless the IRS obtains a court judgment. However, there are a number of circumstances where the ten year collection period may be suspended, such as during the period when the IRS cannot collect, e.g., bankruptcy or a collection due process proceeding.
  • If you believe you have overpaid your taxes, you can file a refund claim asking for the money back. Generally, you must file a refund claim within three years from the date you filed your original return or two years from the date you paid the tax, whichever is later.
  • If you receive a notice proposing additional tax (statutory notice of deficiency), the notice must include the deadline for filing a petition with the Tax Court to challenge the amount proposed.
  • In order to timely challenge a statutory notice of deficiency in Tax Court, you must file your petition within 90 days of the date of the statutory notice (150 days if the taxpayer’s address on the notice is outside the United States or if the taxpayer is out of the country at the time the notice is mailed). If you do not timely file a petition, the amount proposed in the statutory notice will be assessed and you will receive a bill.
  • Generally, you will only be subject to one examination (audit) per taxable year. However, the IRS may reopen a previously examined taxable year if the IRS finds it necessary (e.g., there is evidence of fraud).

Until next time…..Jay-Z once said “I move forward – the only direction. Can’t be scared to fail – search and perfection.”

Jamaal Solomon, EA. MST