So you’ve found some help in the form of a tax litigator and you feel better about the whole affair. What’s next? Educate yourself about tax litigation so that you also have a more encompassing idea about what exactly will transpire throughout the entire process. As I mentioned earlier, tax litigation issues can range from simple to extremely complex, so the more information you possess about the subject, the better. In many situations, your tax litigator will need to have counseling sessions with you in order to determine your next move, and if you are well versed in the procedures which are taking place, the meetings will go much more smoothly and quickly. So continue reading for a quick overview of the litigation process! Tax litigation has three initial phases, and it is these three phases which I will be providing some insight into.
The first is the auditing phase. This is the probably the phase that you’re in right now if you’ve been seeking help on the internet and from your friends. It means that the IRS has found some discrepancy in your financial account and they are conducting an audit. They want to know if you’ve been paying the correct amount of taxes, so in order for them to find out, they will request for you to send them tax documents. Keep calm, and if you’ve already employed a tax litigator to assist you, seek counsel from them on what information to provide and what not to.
The second phase in the initial overall process is the appeals phase. Once the audit has been completed by the IRS agent that’s bugging you, you as the taxpayer have the right to file a protest letter if you would like to dispute the outcome of the audit. Again, this should only be done upon advice provided by your financial support, tax lawyer, etc. There is a possibility of both parties reaching a settlement in this phase, so as to avoid having to undergo the lengthy, time-consuming process of litigation. You may be able to settle your dispute during this phase and avoid any unpleasant outcomes, so listen carefully to the advice of your tax attorney and follow their instructions to the letter.
The third phase is the trial phase, and this happens if no negotiation was reached during the appeals phase and the defending party (aka, you), has made the decision to litigate the tax dispute. Two types of tax litigation may occur during this phase; these are the deficiency litigation and the refund litigation. A simple way for you to understand these two types of litigation are that either the taxpayer (you) will either decide to pay the disputed amount of tax or not.