March 03, 2021

When someone, either an individual or a business, fails to submit a yearly tax return, the IRS uses the information that it has available to create one for them. After they do this, they’ll send out a proposed tax assessment, which includes the amount of money that they believe you or your business owes them. Receiving one of these notices can be a bit intimidating, especially if you have never gotten one before or are not anticipating owing that much money in taxes for the previous year. Thankfully, there are some things that you can do once you receive one.

How to Protest a Proposed Assessment

Since the IRS sends out proposed assessments based on the information available to them, it may be incorrect. This means that you can protest the proposed assessment, with the help of a tax professional who is familiar with these kinds of IRS proceedings and can guide you through the process. In order to protest the notice, you need to consider and then request an appeal.

Start by considering an appeal against the proposed assessment. As long as the notice did not specifically stipulate that you could not appeal, this is an option that may be open to you. Do not sign the agreement form that may be included in with the proposed assessment. Doing this means that you agree with their findings, and you do not in this case. Instead, since you question either how they applied the laws or the amounts that they used in order to determine how much you owe in taxes, you can request an appeal.

Although you can file an appeal request on your own, it is highly recommended that you seek out the help of a lawyer or tax professional, as the process can be a bit tricky and must be done correctly. You must write a letter stating that you are requesting the appeal, which counts as a formal written protest. However, if the amount that the IRS claims that you owe is $25,000 or less, you may qualify under the small case request option, which involves a different set of procedures.

Certain organizations, including S-corporations, partnerships, and employee plans, among others, are not eligible for a small case request. With that said, many other organizations do fall within the allowed category. In order to protest the proposed assessment under the small case request guidelines, consult a tax professional immediately for advice and then follow the instructions included in the notice.

Once you hear back from the IRS regarding your appeal, you may have the right to further disagree with their findings.

How to Pay your Proposed Assessment

On the other hand, if you agree with the IRS findings, you can pay your proposed assessment amount without filing an appeal. You can either set up an installment agreement with the IRS and pay the initial installment, with the remaining ones set up to come directly out of your specified bank account, or you pay the entire amount in full. If you have any questions regarding how to make your payment or set up an installment plan, consult your professional tax preparer for further assistance.

Contact Us Today

If you have received an IRS proposed assessment and have a number of questions about it, please reach out to the tax advisors at the Enterprise Consultants Group. We have many years of experience in the field and can answer your questions, discuss your rights, and provide actionable options. Please contact us online or at (800) 575-9284 today to schedule a free and confidential consultation to see how we can help you.

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