Author: James Mauro

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IRS Independent Office of Appeals

When dealing with the Internal Revenue Service during the initial stages of a tax case, whether it involves an audit, collection issue, request for penalty relief, or a proposed plan of resolution such as an Offer In Compromise, taxpayers as well as tax professionals often overlook the right to resolution through the use of the IRS Independent Office of Appeals.  The Office of Appeals is available in most cases to resolve disputes, without litigation, in a way that is fair and impartial to the taxpayer.  The origin of cases reviewed by the Office of Appeals include:

  • Examination Appeals, which involve the review and resolution of general docketed and non-docketed audit cases generated from the IRS audit deficiency determinations.
  • Collection Appeals, which involve the review and resolution of cases involving Collection Due Process, Offers in Compromise, Trust Fund Recovery Penalties, Jeopardy Levies, Collection Appeals Program (CAP), and other such cases in which a taxpayer has been assessed a liability in which they are attempting to amicably resolve.
  • Claim for Refund or Request for Abatement of Penalty Appeals, which involve the review and resolution of cases involving a taxpayer’s claim for a refund of an overpayment of tax or request for an abatement of certain taxes, interest, penalties, fees, or additions to tax.
  • Specialized Examination Programs & Referrals, which involve the review and resolution of a variety of specialized programs such as international issues, estate and gift issues, tax-exempt and governmental entity issues, tax computations, innocent spouse, TEFRA, art appraisal services and penalty appeals.

The Office of Appeals has the independent authority and jurisdiction over most cases it reviews, with the ability to compromise or concede issues that the IRS has previously decided against a taxpayer.  The Office of Appeals ultimately settles, to the satisfaction of the taxpayer, approximately 80% or more of the cases it reviews.  Being aware of the process and procedure involved in this resolution tool, including how to stage a case for the potential for such an appeal while it is under audit or in its initial investigation stage and how to present a case to the Office of Appeals once an appeal is elected, is key to a favorably and cost saving resolution in most cases.

Prior to joining Dickinson Wright, James Mauro served as legal counsel for the IRS, as a Senior Tax Attorney with the Office of Chief Counsel, and as a Special Assistant United States Attorney with the Department of Justice, where he developed an expertise in tax appeals, audits, collections, and litigation.  Since moving into the private sector and practicing law at Dickinson Wright, his unique expertise and extensive experience has proved to be invaluable in assisting individuals, small businesses, and major corporations in such cases.  You may contact him at 517-487-4701 or jmauro@dickinsonwright.com for more information or assistance regarding tax cases that involve the IRS.

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Taxation

About the Author:

James Mauro is a Member with Dickinson Wright’s Tax Group. He can be reached at 517-487-4701 or jmauro@dickinsonwright.com, and his biography can be accessed here.

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United States Tax Court Launching New Case Management System – Dawson

In December 2020, the United States Tax Court will be launching DAWSON (Docket Access Within a Secure Online Network), the Court’s new case management system. The Court expects DAWSON to be active no later than December 28, 2020. Beginning at 5:00 PM Eastern Time on November 20, 2020, the current e-filing system will become inaccessible and all electronic files will become read-only. In early December, those with current access to the old system will receive a new user name and temporary password for DAWSON and must promptly act within 7 days after notice, in order to avoid an interruption to access to your electronic case records.

For more information and updates, including FAQs, please continue to monitor the Court’s website, www.ustaxcourt.gov, or contact James Mauro in our Lansing, Michigan office (517-487-4701), or any other attorney in our Tax Practice Group.

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Spousal Tax Relief

Taxpayers should be aware that by signing a joint tax return with your spouse, you are jointly and severally (individually) responsible for any tax, interest, and penalties that arise from that return.

The IRS can pursue collection from either you or your spouse (or former spouse). However, you may be absolved of part or all of the liability if you qualify for one of three relief programs offered by the IRS: 1) Innocent Spouse Relief — if your spouse did something wrong giving rise to the tax liability due; 2) Separation of Liability — if the liability can be allocated between you and your spouse (or former spouse); or 3) Equitable Relief — if you do not qualify for innocent spouse relief or separation of liability, but exceptional circumstances justify relief from liability at issue.

These three relief programs may prove to be beneficial to a taxpayer that has signed a joint tax return with a spouse in situations where the IRS is pursuing action against the taxpayer based on joint and several liability.

For more information, please contact James Mauro at 517-487-4701 or any other attorney in our tax group.

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How Long Should You Keep Your Tax Records?

The length of time you should keep tax records depends on the action, expense, or event which the records will substantiate. Generally, you should keep records until the statute of limitations period for an audit or assessment of that tax return expires:

  • 3 YEARS from the date you filed your original return or 2 years from the date you paid the tax, whichever is later.
  • 4 YEARS for employment tax records, after the date that the tax becomes due or is paid, whichever is later
  • 6 YEARS if there is a chance that the IRS may allege that you under-reported more than 25% of the gross income shown on your return (i.e., a questionable deduction or tax exempt unreported income).
  • 7 YEARS if you filed a claim for a loss from worthless securities or bad debt deduction.
  • INDEFINITELY maintain a copy of your return, as well as any significant income or expense records that may be needed to defend a claim of an unfiled or fraudulent return, as there is no statute of limitations regarding such.

When your records are no longer needed for tax purposes, do not discard them until you check to see if you have to keep them longer for other purposes – i.e., insurance or creditor issues.

If you have any questions or would like further information, please contact James F. Mauro in the Lansing, Michigan office at 517-487-4701.