What do You do if you lost your audit and you could not reach a settlement with the IRS on appeal?
You can go to Tax Court.. On average more than 30,000 taxpayers file petitions in Tax Court in any given year. You can actually file a case in other federal courts but in the other courts you have to pay the tax first. Only in Tax Court can you fight the government without paying the tax first.
Filing the case in Tax Court gives you an excellent chance of reducing your tax liability. Over 90% of all the cases filed in Tax court Are settled without going to trial. Keep in mind settlement means a compromise….. Which means the government reduces your tax bill. And for those cases that go to trial taxpayers come out ahead more often than not.
It’s not difficult to file a petition in Tax Court but keep in mind that you can be punished for filing what is deemed a frivolous filing. In my opinion however there is always a legitimate reason for arguing with an audit report. Note : do not file a tax protester petition. Many folks take the stance that our Tax system is unconstitutional. With you believe that or not, if you take That position all you will get out of it is Heartache And maybe even a fine. The government flags those people and $5000 fines are not unusual.
Once the IRS issues you a Notice of Deficiency You only have 90 days to file a petition in Tax . The 90 day time Period begins to run from the date on the letter.
Another point you can go to Tax Court without hiring a lawyer..