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Tax controversy: Sometimes it's the IRS' fault

Communication is a two-way street. It is successful when sender and receiver actually exchange information. Breakdowns in personal communications can mean big trouble for Minnesota spouses, parents, children and whole families. Business conducted without clear communication can quickly lead to disaster.

As we have noted previously here, communicating with the Internal Revenue Service is essential for the effective resolution of disputed tax matters. However, the IRS is a government agency and as most readers likely would agree, government sometimes fails to communicate. When that happens, tax disputes involving significant amounts of money can erupt. Fair resolution may require help from a qualified tax law practitioner.

That foul-ups in communication occur is reinforced by a recent report by the Treasury Inspector General for Tax Administration. As is required by law, the IG's office conducted an audit of IRS lien notice procedures for a fiscal year to see how well the agency followed the legal requirements for notifying taxpayers of tax liens.

According to the rules, the IRS is supposed to send those notices, which are supposed to include information about taxpayer rights, in a timely fashion to a person's last known address.

After studying a sampling of notices that went undelivered, the IG's audit found that a few them were not sent to the taxpayer's last known address, but to one that was older. Keep in mind, the IRS had the right information. In addition to using outdated addresses, the audit found that agents failed to send copies of the notices to spouses identified as secondary taxpayers.

The IG's report suggested that because statutory requirements ensuring due process were not met, the liens could be deemed invalid.

Anyone notified about adverse tax actions by the IRS has rights, but they can't be exercised if individuals aren't aware of them and the IRS fails to follow proper procedure for notification. This is why consulting an attorney is always recommended.

Source: AccountingToday.com, "IRS Misrouted Tax Lien Notices," Michael Cohn, July 19, 2016

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