taxgirl® Said it Best: Open Your Mail!

In the process of getting familiar with my Twitter account, I came across a fellow tax attorney named Kelly Phillips (A.K.A taxgirl®) from Philadelphia, PA. While exploring her twitter page and retweeting some of her amusing tweets, I also discovered that she is a blogger for Forbes. One of her blogs, "My Best Tax Advice Ever, Part I: Open Your Mail," hit close to home. 

One of the main reasons deadlines are missed and taxpayers are burned by taxing agencies is because they do not open their mail or refuse certified mail. This reminds me of a client I represented two years ago. He came to us hoping that we would fight his case before a California State taxing agency. After hearing his story, we agreed that he had a great case and had a high chance of winning if he could get the merits of the case heard by a judge. Unfortunately, after further investigation, we discovered that not only did he miss the deadline to file for an appeal (if that was all we could have still had a chance to fight his case by arguing lack of notice) he actually refused notice by not accepting certified mail from this agency. Since the agency had written record of this refusal there was little we could do to fight the liability.   

Fortunately, this taxpayer still had the option of paying his liability in full and filing a claim for refund. Alternatively, if he could not afford to go this route and wanted to pay off the liability, he could still apply for an installment agreement or an Offer in Compromise (OIC) Doubt as to Collectibility  with this agency in order to try to settle his debt for less (please note that in order to qualify for an OIC Doubt as to Collectibility the taxpayer must participate in full financial disclosure and the agency must determine that based on specific guidelines, it would be impossible for the agency to collect the full amount of the liability during the collection period). 

Contrary to popular belief, the IRS is actually easier to deal with than California State agencies. Many taxpayers who miss deadlines with the IRS (i.e. deadline to get into Tax Court) still have other options available to them if they want to continue fighting a liability. For example, they can apply for an audit reconsideration or file a claim for refund (as discussed above). Another option is to apply for an OIC Doubt as to Liability. Unlike the OIC Doubt as to Collectibility, discussed above, in order to qualify for an OIC Doubt as to Liability there must be a legitimate doubt from the viewpoint of both the taxpayer and the IRS that an assessed tax liability is correct. 

In conclusion, please open your mail from the IRS when you receive it. It will make your life a lot easier and cheaper in the long run. Also, check out taxgirl® at http://blogs.forbes.com/kellyphillipserb/.

This content is not intended as legal advice, and cannot be relied upon for any purpose without the services of a qualified professional.