Opinion ID: 2631887
Heading Depth: 2
Heading Rank: 1

Heading: overview of tax appeal process

Text: ¶ 15 When a federal tax return is selected for audit, an examination is performed by an IRS examiner. At the conclusion of the examination, the taxpayer is informed of the examiner's findings and any proposed deficiency assessments. If the taxpayer agrees with the findings of the examiner, he or she may sign the appropriate forms acknowledging tax liability. By signing these forms, the taxpayer (1) waives the required statutory notice of deficiency, (2) waives the corresponding prohibition on collection for ninety days under the Internal Revenue Code, and (3) waives his or her right to litigate the proposed deficiency in Tax Court. If the taxpayer disagrees with the proposed adjustment, a letter is issued with a copy of the examining agent's report. This letter provides the taxpayer a second opportunity to accept the proposed assessment and informs the taxpayer of his right to an administrative appeal. The letter also indicates that failure to respond within thirty days causes the assessment to be deemed final. [4] This letter is known as the thirty-day letter. ¶ 16 With respect to the appeals process, if the taxpayer does not accept the findings of the examiner, he may request a review by the District Office. If the taxpayer disagrees with that decision, he may also request a review by the Appellate Division. The determination of the Appellate Division is the final decision of the IRS. However, if the taxpayer disagrees with the decision of the Appellate Division, the IRS issues a second letter, which constitutes the statutory notice of deficiency and informs the taxpayer of his right of appeal to the United States Tax Court. [5] According to this letter, the appeal with the Tax Court must be filed within ninety days; otherwise, the assessment is deemed final and the IRS collection process begins. This letter is known as the ninety-day letter. If the taxpayer files a petition with the Tax Court, that court reviews the entire assessment and issues the final decision. See generally 4 Boris I. Bittker & Lawrence Lokken, Federal Taxation of Income Estates and Gifts, ch. 112 (2d ed.1992).