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Tax litigation could address disagreements with the IRS

On Behalf of | Feb 12, 2021 | Tax Audits

Some taxpayers may believe that they have a genuine claim for certain deductions on their taxes or that they are appropriately entering information on certain forms. However, the IRS does not always agree with taxpayers on these matters, and it is not uncommon for the IRS to request that the taxpayer pay more taxes for what the agency views as a filing error or deficiency. Of course, if the taxpayer does not agree with the IRS, tax litigation could ensue.

Should taxpayers litigate?

Taking such matters to Tax Court is warranted in some cases, especially if Georgia taxpayers believe they have filed their taxes or reported income correctly. That does not mean that the Tax Court will always agree with the taxpayer. However, it could be worthwhile to work toward a favorable outcome, particularly if a successful case could keep the taxpayer from owing a considerable amount to the IRS.

What matters are addressed in court?

Various tax-related matters can be addressed in Tax Court. For example, one person claimed hotel costs as business expenses because she stayed in a hotel in efforts to get away from clients who continually bothered her at her home-based business. The IRS did not agree that these were business expenses, so the matter went to court. Additionally, one man tried to claim a $25,000 settlement paid to him by the man his wife was having an affair with as a tax-free gift, but the Tax Court considered it taxable income.

Considering litigation?

If the IRS sends Georgia taxpayers notices of deficiency or an audit, those taxpayers could be on the line for a considerable amount of owed taxes. If taxpayers believe that they are in the right, tax litigation could help them present their evidence as to why they should not face the repercussions desired by the IRS. As with any tax matter, this ordeal could become complicated, so it is wise to have the right help when reviewing information and moving forward with a case.