Louie is the sole shareholder of a perfume manufacturing corporation. The corporation’s tax return was examined, resulting in unagreed adjustments that were appealed and sustained at the IRS Appeals Office. Louie still believes that the adjustments are erroneous and wants a judge to hear his reasons. The corporation timely files a petition in the U.S. Tax Court contesting the adjustments. At the beginning of the trial, the attorney for the corporation files a motion requesting the judge to order that the IRS has the burden to prove that its adjustments are not erroneous. Which of the following criteria must be satisfied before the burden of proof shifts to the IRS?
According to Publication 556, in any court proceeding, “the IRS has the burden of proof for any factual issue if you have introduced credible evidence relating to the issue,” provided that “you also . . . have
| All of the following reasons are acceptable for transferring an examination from one IRS district to another EXCEPT |
When a request is received to transfer a return to another district for examination, the district director having jurisdiction may transfer the case to the district director of the other district. The IRS will determine the time and place of the examination. In determining whether a transfer should be made, circumstances considered include the change of the taxpayer’s domicile, discovery that the taxpayer’s books and records are kept in another district, change of domicile of an executor or administrator to another district, and the effective administration of the tax laws [26 CFR 601.105(k)]. The convenience of the taxpayer’s representative is not an acceptable reason to transfer an examination.
| Disputes involving which areas of taxation may not be resolved in a deficiency determination proceeding in United States Tax Court? |
Thus, employment tax is not a tax over which the United States Tax Court has jurisdiction.
| The IRS has the burden of proof for any factual issue in a court proceeding if the taxpayer has | |
According to Publication 556, in any court proceeding, the IRS has the burden of proof for any factual issue if the taxpayer has introduced credible evidence for the issue, provided that the taxpayer has done all of the following:
Within 6 months from the date he filed it, Y received a formal notice from the IRS by certified mail disallowing his $10,000 tax refund claim. What is Y’s appeal?
Section 6532(a)(1) provides the general rule that a suit must be brought within 2 years of the time of mailing of the notice. Appeal may be made to a U.S. District Court or the U.S. Court of Federal Claims. (The U.S. Claims Court was retitled the U.S. Court of Federal Claims effective November 1, 1992. No change in its basic function occurred at that time.)
| If there is an underpayment of tax on your return due to fraud, how much is the penalty added to your tax? |
| Partnership XYZ is seeking to appeal a tax matter from the most recent period. The proposed decrease in taxes owed would result in a tax liability of $22,000. Which of the following is true? |
In all partnership and S corporation cases, a written protest must be filed without regard to the dollar amount at issue.
| Emily is notified of a deficiency in her recently paid taxes. In response, she makes the necessary payment. However, the payment is late. The IRS is seeking to receive interest due to the delayed receipt of the initial payment. Which of the following conditions would allow Emily to seek abatement of the interest? | |
If the taxpayer is not significantly responsible for the delay in payment, the only remaining step is to contact the IRS in writing requesting abatement. |
| Appeal from the U.S. Court of Federal Claims is to the | |
The U.S. Court of Appeals for the Federal Circuit is the appellate court to which appeals from the U.S. Court of Federal Claims are taken.
| The examination of Greta’s tax return for 2019 resulted in adjustments creating a tax liability in the amount of $30,000. Greta does not believe she owes anything. A Notice of Proposed Income Tax Deficiency is issued to Greta, who wants to appeal the Revenue Agent’s adjustments to the IRS Office of Appeals. Greta must file a written protest letter no later than which of the following periods? |
In order to request an appeals conference with the IRS, both Publication 5 and Publication 556 state that the taxpayer must follow the instructions in the letter received from the IRS. This letter should specify a time limit during which the taxpayer may file a protest. Publication 556 also states that, within a few weeks after the closing conference with the examiner and/or supervisor, the taxpayer will receive a package with a letter (known as a “30-day letter”) notifying him or her of his or her right to appeal the proposed changes within 30 days. The taxpayer generally has 30 days from the date of the 30-day letter to tell the IRS whether (s)he will accept or appeal the proposed changes.
| Which of the following statements concerning the procedure for a formal written protest submitted by a representative to obtain an appeals office conference is false? |
Generally, a formal written protest must contain a sworn statement made by the taxpayer under penalty of perjury declaring that the statement of facts presented in the protest is true, correct, and complete. However, a substitute declaration may be submitted by the taxpayer’s representative stating that the representative prepared the protest and accompanying documents, and whether the representative knows personally that the statement of facts in the protest and the accompanying documents is true and correct.
| If your tax return was examined for the same items in either of the 2 previous years and no change was proposed to your tax liability | |
The IRS should be notified to determine if the examination should be discontinued (Publication 556).
| Fast-track mediation services are offered by the IRS for disputes regarding all of the following EXCEPT | |
Fast-track mediation services exist to help taxpayers resolve many disputes resulting from examinations, offers in compromise, trust fund recovery penalties, and certain other collection actions (such as due process cases). Most cases qualify for this mediation unless they are docketed in any court. However, some cases are specifically excluded from fast-track mediation. These include issues without definite legal precedent (or judicial agreement), Industry Specialization Program issues, issues for which the taxpayer has requested competent authority assistance, Service Center penalty appeals cases, Collection Appeals Program cases, Automated Collection System cases, and constitutional issues.
| Following a Collection Due Process (CDP) hearing with the Office of Appeals to discuss a levy or lien, a taxpayer does not agree with the determination made by the Office. Within how many days can the taxpayer file suit to contest the determination? |
The taxpayer in this case has 30 days to bring suit in a court of proper jurisdiction (the U.S. Tax Court or U.S. District Court, depending on the circumstances) (Pub. 594).
| Which of the following statements is false with respect to the United States Tax Court? |
The Tax Court’s jurisdiction is defined under Sec. 7442. In general, the Tax Court’s jurisdiction covers income, estate, gift, excise, and private foundation taxes.
Which of the following is usually required before taxes may be assessed?
The assessment of taxes is made by recording the liability of the taxpayer in the office of the Secretary of the Treasury (Sec. 6203). Taxes shown on a return filed by a taxpayer, overstatements of credits, and mathematical errors may be assessed immediately (Sec. 6201). However, in the case of a deficiency (the tax imposed in excess of the sum of the amount shown on the return plus amounts previously assessed), a notice of deficiency must be sent to the taxpayer prior to assessment [Sec. 6213(a)]. The taxpayer has 90 days after the notice of deficiency is mailed to file a petition in the Tax Court (which prevents the assessment of taxes until the decision of the Tax Court is final). If a petition is not filed, taxes may be assessed 90 days after the notice of deficiency is mailed.
Before the initial in-person interview between the IRS and the taxpayer to determine or collect any taxes, a taxpayer should receive which one of the following publications from the IRS?
Section 7521(b) provides that prior to the initial in-person interview, an officer or employee of the IRS must provide to the taxpayer an explanation of the audit process and the taxpayer’s rights under such process, or if the interview is related to the collection of any tax, an explanation of the collection process and the taxpayer’s rights under such process (Publication 1).
Which of the following statements concerning the preparation of a case for appeal before an IRS appeals office is false?
| If an individual paid income taxes in the current year through withholding but did not file a current-year return because his income was insufficient to require the filing of a return, the deadline for filing a refund claim is |
A claim for refund must be filed within 3 years from the due date (plus extension) or 2 years from the time the tax was paid, whichever is later. Section 6511(a) further states that if no return was filed, the claim for refund is due within 2 years from the time the tax was paid. For tax years ending after August 5, 1997, taxpayers who initially fail to file a return, but who receive a notice of deficiency and file suit to contest in Tax Court during the third year after the return due date, are permitted to obtain a refund of excessive amounts paid within the 3-year period prior to the deficiency notice. The taxpayer could file the return within 3 years and receive a refund; however, the question is asking about the timing of filing a refund claim.
| One difference between the Tax Court and a District Court is that |
| D’s tax return for 2019 was examined by the IRS for contributions and medical expenses. The examination resulted in “no change” to his tax liability. He received notification of an examination for the same items for his 2021 tax return. What action should he take? |
If the same items were examined in either of the previous 2 years and the examination resulted in no change to the tax liability, the taxpayer should notify the person whose name and phone number appear in the appointment letter. The IRS will suspend but not cancel an audit (while reviewing its files to determine whether to proceed) so as to avoid repetitive examinations of the same items (Publication 556).
Harry claimed gambling losses on his income tax return. The return was examined by the IRS, and the losses were disallowed. Harry pursued an appeal before the IRS Appeals Office, which sustained the Revenue Agent’s adjustment. Harry now wants to take his case to a judge. In which of the following courts can Harry file a tax action?
If a taxpayer still disagrees with the IRS after an appeals conference, the taxpayer may bring his or her case to the United States Tax Court, the United States Court of Federal Claims, or a United States District Court. Harry must file his claim within 90 days of receiving a Notice of Deficiency if he wants to take his case to Tax Court. To file in either District Court or the Court of Federal Claims, Harry must pay the deficiency and file a claim for a refund. Harry should request that the IRS immediately reject his claim so he may file his court case quickly.
| Joe, a calendar-year taxpayer, filed his federal income tax return, with a refund due, for tax year 2021 on April 1, 2022. The last day to timely file a claim for refund with respect to that return is |
Ron’s tax returns were examined for 2016, 2017, and 2018, all of which resulted in adjustments increasing income reported on Schedule C of the returns. The Revenue Agent determined that the failure to report the income was intentional. The Revenue Agent proposed a fraud penalty. The adjustment for each year was in the amount of $100,000. The fraud penalty for each year should be in which of the following amounts?
Publication 17 states, “If there is any underpayment of tax on your return due to fraud, a penalty of 75% of the underpayment due to fraud will be added to your tax.” Ron, therefore, owes $75,000 ($100,000 × 75%) for each year.
The Statutory Notice of Deficiency is also known as
Generally, the Tax Court hears cases before any tax has been assessed or paid. In order to petition, the taxpayer must first receive a notice of deficiency. A notice of deficiency is a 90-day letter (150-day letter if it is addressed to a taxpayer outside the U.S.) that requires a petition to be filed within 90 days (150 days for a taxpayer outside the U.S.) from the date the notice is mailed to the taxpayer. If the petition is not filed on time, the tax will be due within 10 days, and the case cannot be taken to the Tax Court.
Nico wants his income tax case to be handled under the Tax Court’s small tax case procedure. All of the following statements regarding the small tax case procedure are true EXCEPT
The IRS Restructuring and Reform Act of 1998 increased the deficiency or overpayment limit for cases that may be heard by the Small Tax Case Division of the Tax Court. The limit is now $50,000 [Sec. 7463(a)]. It is the taxpayer’s option (subject to agreement by the Tax Court) for the case to be heard by the Small Tax Case Division. Generally, the Tax Court hears cases before any tax has been assessed or paid. In order to petition, the taxpayer must first receive a notice of deficiency. Any case decided in the Small Tax Case Division of the Tax Court will not be reviewed by any other court.
A claim for a refund must be filed
Under what circumstances may the examination of a tax return be transferred to another district?
In most cases, an income tax examination is conducted in the Internal Revenue Service district office nearest the taxpayer’s place of residence. The examination may be transferred to another IRS district office if the taxpayer’s books and records are kept in another district, the taxpayer has changed domiciles, or an executor or administrator has moved to another district [26 CFR 601.105(k)]. The IRS has the authority to determine the time and place of the examination. |
| The Tax Court of the United States | |
The Tax Court of the United States is established by Section 7441 of the Internal Revenue Code under Article I of the U.S. Constitution. It hears exclusively federal tax cases, without juries. A jury trial of a federal tax case is available in a U.S. District Court.
| If you don’t agree with the Internal Revenue Service examination conclusion, you may take your case to the United States Tax Court for the following: |
If a taxpayer and the IRS still disagree after an appeals conference or the election was made to bypass the IRS appeals system, the case may be taken to the U.S. Tax Court, the U.S. Court of Federal Claims, or a U.S. District Court. State income tax matters, however, are not handled by the U.S. Tax Court.
| Taxpayer B wishes to request an appeals conference with the IRS. B follows the instructions in the 30-day letter received from the IRS and successfully requests a conference. The 30-day letter does NOT include |
| Individuals NOT permitted to represent the taxpayer before appeals officers of the IRS include |
Certified financial advisors are not permitted to represent taxpayers before appeals officers of the IRS.
| At the conclusion of an audit, the taxpayer can appeal the tax decision to a local appeals office. Which statement regarding appeal procedures is false? |
Over which issue does the Tax Court have jurisdiction?
Nicholas wants his income tax case to be handled under the Tax Court’s small tax case procedure. All of the following statements regarding the small tax case procedure are true EXCEPT
The IRS Restructuring and Reform Act of 1998 increased the deficiency or overpayment limit for cases that may be heard by the Small Tax Case Division of the Tax Court. The limit is $50,000 [Sec. 7463(a)]. It is the taxpayer’s option (subject to agreement by the Tax Court) for the case to be heard by the Small Tax Case Division. Generally, the Tax Court hears cases before any tax has been assessed or paid. In order to petition, the taxpayer must first receive a Notice of Deficiency. Any case decided in the Small Tax Case Division of the Tax Court will not be reviewed by any other court.
| A taxpayer does not respond to a 30-day letter and does not reach an agreement with an Appeals Officer. What will the IRS send the taxpayer next? |
If a taxpayer does not respond to the 30-day letter or does not reach an agreement with an Appeals Officer, the IRS will send the taxpayer a 90-day letter (also known as a Notice of Deficiency). |
| A taxpayer may choose to pay a disputed deficiency and then file a claim for refund. If the claim is denied by the Internal Revenue Service or if no decision is made in 6 months, the taxpayer may petition |
If the IRS has not acted upon a claim for refund within 6 months from the date it is filed, a taxpayer may file suit for refund in a U.S. District Court or the U.S. Court of Federal Claims. The suit must be filed no later than 2 years after the IRS informs the taxpayer of the rejection, or the 6-month limit runs out. |
| The small tax case procedures in the Tax Court allow resolution of cases under a set of rules that are simpler than the normal Tax Court procedures. A case may be designated a small tax case in the Tax Court if the amount of tax at issue for each tax year or period is not more than |
The Tax Court has jurisdiction over all of the following taxes EXCEPT
The Tax Court is a court of limited jurisdiction. Section 7442 states that the Tax Court has such jurisdiction as is conferred on it by Title 26 of the U.S. Code; by Chapters 1, 2, 3, and 4 of the Internal Revenue Code of 1939; by Title II and Title III of the Revenue Act of 1926; or by laws enacted subsequent to February 26, 1926. The Tax Court’s jurisdiction covers income, estate, gift, excise, and private foundation taxes. The Tax Court has no jurisdiction over employment taxes. The self-employment tax is an income tax, however, and thus is within the purview of the Tax Court.
| The IRS has begun an examination of Mark’s 2019 income tax return. The IRS would like to ask Mark’s neighbors questions with respect to that examination. There is no pending criminal investigation into the matter, and there is no evidence that such contact will result in reprisals against the neighbors or jeopardize collection of the tax liability. Before the IRS contacts the neighbors, the IRS must |
The IRS must give the taxpayer reasonable notice before contacting other persons in examining or collecting a tax liability. The IRS must also give the taxpayer notice of specific contacts by providing the taxpayer with a record of persons contacted on both a periodic basis and upon the taxpayer's request. The notice does not apply
| If a taxpayer and the IRS still disagree after the appeals conference, which of the following can be contested in the United States Tax Court? |
The Tax Court is a court of limited jurisdiction. Section 7442 states that the Tax Court has such jurisdiction as is conferred on it by this title; by Chapters 1, 2, 3, and 4 of the Internal Revenue Code of 1939; by Title II and Title III of the Revenue Act of 1926; or by laws enacted subsequent to February 26, 1926. The Tax Court’s jurisdiction covers income taxes; estate taxes; gift taxes; certain excise taxes of private foundations, public charities, qualified pension and other retirement plans, or real estate investment trusts; and private foundation taxes.
| Which of the following statements relating to the statutory Notice of Deficiency is false? |
Normally, once a taxpayer pays the tax, the Tax Court does not have jurisdiction, and the taxpayer must file a claim for a refund in the U.S. District Court or the U.S. Court of Federal Claims. However, Sec. 6213(b)(4) provides that payment of additional tax due after the mailing of a Notice of Deficiency does not deprive the Tax Court of jurisdiction over the deficiency. Section 6213(a) provides that a taxpayer may file a petition with the Tax Court for a redetermination of the deficiency within 90 days (or 150 if the taxpayer lives outside the U.S.) after the Notice of Deficiency is mailed. If 90 (or 150) days pass and a petition is not filed, taxes may be assessed, and the taxpayer must pay the tax and file a claim for a refund.
Wesley timely filed his tax year 2018 Form 1040 tax return on April 15, 2019, and paid the $2,000 tax as shown on the return at the time of filing. The return was subsequently examined, and Wesley signed an agreement form for the proposed changes on January 31, 2020. He paid the additional tax due of $10,000 on March 31, 2020. In 2021, Wesley located missing records that he believed would make $5,000 of the additional assessment erroneous. Which of the following statements accurately states the date by which Wesley must file a claim for a refund?
Sections 6511(a) and (b) state that a claim for refund must be filed within 3 years from the time the return was due or 2 years from the time the tax was paid, whichever is later. Thus, the deadline would either be April 15, 2022 (3 years from the time the return was due), or March 31, 2022 (2 years from the time the tax was paid). Because April 15, 2022, is later, this is the date by which the claim for refund must be filed.
Anna’s 2021 individual tax return was examined, and the IRS proposed changes resulting in additional tax. Anna wishes to bypass the IRS’s appeal system and file a refund suit in the U.S. Court of Federal Claims on contested income tax issues. Your advice to Anna should be that she
A taxpayer may file a refund suit in the appropriate District Court or the U.S. Court of Federal Claims only after the IRS rejects a refund claim. Thus, if the taxpayer does not want to appeal within the IRS, (s)he should request in writing that the claim be immediately rejected to enable jurisdictional requirements for court proceedings to be satisfied earlier.
| The Secretary is generally authorized to abate the unpaid portion of the assessment of any tax or any liability in respect thereof, for all of the following, EXCEPT it is |
An abatement is a reduction or elimination of tax, penalties, or interest. Taxes may be abated when the IRS determines that there was an over-assessment. The Secretary is authorized to abate the unpaid portion of the assessment of any tax or any liability in respect thereof, which is excessive in amount, is assessed after the expiration of the period of limitation properly applicable thereto, or is erroneously or illegally assessed. The Secretary is not authorized to abate the tax, penalties, or interest relevant to the frivolous return unless it is due to unreasonable error or delay by an officer or employee of the IRS, not the tax return preparer. |
A frivolous income tax return is one that does not include enough information to figure the correct tax or that certain information clearly showing that the tax that was reported is substantially incorrect. If a taxpayer files a frivolous return, which penalty applies specifically to the taxpayer for the frivolous return?
Gina disagreed with the results of an IRS examination of her tax return. She pursued the appeals procedures and disagreed with the appeals officer. If she wishes to appeal further, Gina may
If there is no resolution of the tax dispute in the appeals conference, the IRS will issue a 90-day letter (Notice of Deficiency) to the taxpayer. Within 90 days of receipt of the notice, the taxpayer may file a petition with the Tax Court. |
| If a taxpayer and the IRS still disagree after an appeals conference, the taxpayer can take his or her case to |
If a taxpayer and the IRS still disagree after an appeals conference, or the election was made to bypass the IRS appeals system, the case may be taken to the U.S. Tax Court, the U.S. Court of Federal Claims, or a U.S. District Court.
| Elizabeth, a calendar-year taxpayer, filed her Year 1 individual return on March 15, Year 2. She did not pay her Year 1 income tax liability in full until March 30, Year 3. If Elizabeth discovers a mistake on her Year 1 return, what is the last day she may file a claim for a refund? |
Section 6511(b) states that a claim for refund must be made within the time limits specified in the statute of limitations on refunds. A refund may be paid 3 years from the due date (plus extension) or 2 years from the time the tax was paid, whichever is later. Therefore, Elizabeth must file a claim for a refund no later than April 15, Year 5.
Sam is the sole shareholder in an S corporation. The S corporation was examined and the IRS proposed a $20,000 deficiency. What must Sam do to request an appeals conference?
In order to request an appeals conference, the taxpayer must follow the instructions in the letter received from the IRS. The taxpayer needs to file a formal written protest in all partnership and S corporation cases without regard to the dollar amount.
| If a taxpayer and the IRS fail to settle a non-docketed examination controversy in the IRS Appeals Office, the next event to occur is |
In order to petition, the taxpayer must first receive a notice of deficiency. The notice of deficiency provides the taxpayer 90 days (150 days if the taxpayer lives outside the United States) to either agree to the deficiency or file a petition with the Tax Court for a redetermination of the deficiency. |
| Isaac’s income tax return for 2021 was examined. This resulted in an income tax deficiency in the amount of $50,000 from two $25,000 adjustments. The Revenue Agent determined that Isaac was negligent involving the first adjustment and proposed an accuracy-related penalty. The second adjustment was discovered by the Revenue Agent based upon a disclosure statement in the tax return and did not relate to a tax shelter. What is the amount of penalty that the Revenue Agent can propose? |
Publication 17 states, “You may have to pay an accuracy-related penalty if you underpay your taxes because:
The penalty is equal of 20% of the underpayment. . . . However, the amount of the understatement may be reduced to the extent the understatement is due to:
| A taxpayer received a notice from the IRS saying a prior year’s tax return had been examined, creating a tax assessment of $2,560. The taxpayer disagrees with the amount of tax assessed. The taxpayer could request an audit reconsideration in all of the following situations EXCEPT |
In order for a request for an audit reconsideration to be accepted, the liability must be unpaid. If you have paid the amount due in full, you must file a formal claim. There are four reasons a taxpayer may request the audit reconsideration, but by default of the “acceptance” requirements, full payment of liability is not one of them.
Read the following statements regarding the Internal Revenue Service’s appeals system:
Select the best answer from the following options:
Because people sometimes disagree on tax matters, the IRS has established an appeals system. The IRS has concluded that most disagreements can be settled within this system without expensive and time-consuming court trials. However, the disagreements must arise within the scope of the tax laws. For example, a case cannot be appealed based only on moral, religious, political, constitutional, conscientious, or similar grounds. If a taxpayer wishes to bypass the IRS appeals system, (s)he may take his or her case directly to court.
| All of the following statements concerning court appeals and court petitions are true EXCEPT |
If a taxpayer’s refund claim is denied by the Internal Revenue Service or if no decision is made in 6 months, the taxpayer may petition either the U.S. Court of Federal Claims or a U.S. District Court. The U.S. Court of Appeals hears appeals from decisions of the Tax Court, a District Court, and the U.S. Court of Federal Claims. Cases appealed from the Tax Court and a District Court are heard in the Circuit Court of Appeals for the taxpayer’s jurisdiction. Appeals from the U.S. Court of Federal Claims are heard by the Court of Appeals for the Federal Circuit. It is not a court of original jurisdiction.
Peter’s return was examined, and the result was additional tax of $36,000 due to unreported lottery winnings. Peter has received a letter notifying him of his right to appeal the proposed changes within 30 days. Which of the following should Peter do in preparing his appeal?
If a taxpayer wants an appeals conference, (s)he must follow the instructions in the IRS letter sent to him or her. A taxpayer whose proposed increase or decrease in tax, including penalties or claimed refund, is more than $25,000 must submit a written protest of disputed issues. |
| Julie, who lives in Washington, D.C., operated a business without books and records. Her business income and expenses were reported on Schedule C. Julie’s tax return for 2021 was examined, and substantial adjustments were proposed. Julie disagreed with the adjustments and wants to take her case directly to Tax Court. A Statutory Notice of Deficiency was issued to Julie by the IRS Area Director. Julie can file a petition for a small tax case before the U.S. Tax Court during which of the following periods beginning from the date of the issuance of the notice? |
After receiving a Statutory Notice of Deficiency, a taxpayer has 90 days to file a petition in Tax Court. Provided that the amount in dispute in Julie’s case is under $50,000, she may petition the Small Tax Case Division of the Tax Court; however, the period to file a petition is 90 days for both the Small Tax Case Division and the main Tax Court.
Marty timely filed his federal income tax return for 2017. It was selected for examination. During the course of the examination, the Revenue Agent first assigned to the case retired. A second Revenue Agent proposed adjustments to the tax return that Marty believed were erroneous. The second Revenue Agent was assigned to an extended training assignment. Before going on training, Marty and the second Revenue Agent orally agreed that the statute of limitations could be extended to December 31, 2021. Which of the following statements is applicable in order for the IRS to protect its rights?
Because an agreement to extend the statute of limitations is not valid if it is not in writing, the IRS must mail the Statutory Notice of Deficiency within the statute of limitations period. Marty’s tax return for 2017 would have been due on April 15, 2018. Therefore, the IRS must mail the notice by April 15, 2021. |
| Caroline received an audit notification letter scheduling an appointment for July 1, 2020, for the examination of her tax year 2018 Form 1040 return. The week before the scheduled appointment, she received a telephone call from the Internal Revenue Service office canceling the appointment. She was told that she would be contacted at a later date to reschedule the appointment. She was not contacted until July 1, 2021, when she was advised of a new appointment date. Errors identified in the examination resulted in her owing additional tax of $4,000 plus accrued interest of $600. Caroline does not believe that she should have to pay interest for the period that she was waiting for her appointment to be rescheduled. How should she proceed? |
