When a taxpayer files a return, the IRS has the authority to examine the return. This is also referred to as auditing the return. If the IRS believes that the return shows too little income or too many deductions, characterizes ordinary income as capital gain or short term capital gain as long term, lack of withholding or estimated payments, or any other type of error, it can assess additional taxes due as well as penalties and interest. A taxpayer usually benefits from having competent representation during examination.
If an assessment is made by the IRS, the taxpayer may challenge it by filing a petition in Tax Court or by paying the assessment and related interest and penalty and seeking a refund in U.S. District Court. If an assessment goes unchallenged or if the IRS prevails in a challenge, the IRS can impose its federal tax lien on all of the taxpayer’s property. A taxpayer should challenge an IRS position early and not wait until the IRS is trying to collect from him.
David Lanigan has represented clients in Tax Court proceedings and before the IRS Appeals Division, utilizing a wide variety of administrative techniques to promote his clients’ interests. Typical techniques include preparation of formal protests, representation of clients before the appeals division, negotiation of installment payment agreements, preparation of offers in compromise of disputed claims, participating in taxpayer examinations, and seeking Taxpayer Assistance Orders.