Am I Out of Luck if I Don’t File an Appeal Timely?

If the IRS issues an assessment of tax, and you do not appeal to the US Tax Court within 90 days, the tax assessment becomes final and cannot be appealed to the US Tax Court.  However, there are still ways to get the matter reviewed and the tax assessment adjusted. 

One way to get the matter re-opened is to pay the tax and then file for a refund.  If and when the IRS rejects the request for a refund, you will have an opportunity to explain why the assessment is erroneous and you do not owe the tax.  Paying the tax can be burdensome.  But if you have no other appeal rights, doing so gives you a chance to correct an erroneous assessment.   One important note: if the tax assessment relates to payroll taxes or income tax withholding, you only need to pay the tax related to one employee for one tax period in order to seek refund and review of all the tax erroneously assessed.

Another way to get the matter re-opened is to file an Offer-in-Compromise based on doubt as to liability.  When you file the Offer-in-Compromise you have an opportunity to explain to the IRS why you don’t owe the tax.  If the IRS agrees, they will waive the tax assessed.  If the IRS does not agree, the tax assessment stands.  The Offer-in-Compromise program is a voluntary program the IRS offers, and there are no appeal rights from rejection of an Offer-in-Compromise.  But it is a relatively simple and inexpensive way to get a second chance to correct an erroneous tax assessment, and I have had good success with this program.

If you have received a proposed or final tax assessment, call your tax professional.  And always feel free to call or email me to discuss any questions you have about your taxes.    Jsenney@pselaw.com or 937-223-1130. 

AND ONE MORE THING.  InvestOhio is an incentive program implemented by Ohio as part of the new budget that became effective on July 1, 2011. It provides a non-refundable 10% personal income tax credit against Ohio income tax to investors that infuse new equity (cash) into Ohio small businesses. In order to qualify, the business must have assets less than $50 million or annual sales that do not exceed $10 million, and the business must employ at least 50 full-time equivalent employees in Ohio or more than 50% of the business' full time employees must work in Ohio. The business must invest the cash contributed in one of five categories of allowable expenses.  The registration process opened November 14, 2011.  The application process  will start Monday December 5, 2011.  The tax credits are awarded on a first come – first served basis, so time is of the essence. For more information go to the Ohio Department of Development website or give me a call or email at Jsenney@pselaw.com or 937-223-1130.

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Pickrel, Schaeffer & Ebeling Co., LPA, 2700 Kettering Tower, Dayton OH 45423

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