Handling an IRS Audit and Tax Controversy: A Comprehensive Guide

93 questions on handling an IRS audit and tax controversy, answered and cited by the UpLaw editorial team.

• Are records held by my accountant protected from the IRS?
• Are tax accrual workpapers protected from an IRS summons?
• Can a taxpayer challenge the underlying tax liability at a CDP hearing?
• Can a taxpayer recover attorney's fees from the IRS?
• Can a taxpayer sue to challenge an IRS rule before paying anything?
• Can IRS interest be abated?
• Can the IRS contact my bank or customers without telling me?
• Can the Tax Court increase the deficiency the IRS determined?
• Does an IRS agent have to give a Miranda warning?
• Does a taxpayer have to attend an IRS interview in person?
• Does attorney-client privilege protect tax return preparation?
• Does forming a corporation or LLC protect an owner from the trust fund recovery penalty?
• Does IRS voluntary disclosure guarantee no prosecution?
• Does overstating basis trigger the six-year assessment period?
• Does Section 7491 really shift the burden of proof to the IRS?
• How are partnership audits different under the BBA centralized regime?
• How can an unfiled Form 5471 keep an entire tax year open?
• How can a taxpayer stop interest from running while still litigating?
• How does disclosure protect against the substantial understatement penalty?
• How does the divisible tax exception to Flora work?
• How does the IRS select returns for audit?
• How do you tell when a civil IRS audit is turning criminal?
• How do you win at IRS Appeals?
• How is a CDP determination reviewed, and what happens if the deadline is missed?
• How long does a taxpayer have to petition the Tax Court?
• How long does the IRS have to assess additional tax?
• How long does the IRS have to collect an assessed tax?
• How much deference do Treasury regulations get after Loper Bright?
• How should a business think about an IRS audit?
• Is a notice of deficiency valid if the taxpayer never received it?
• Is "my accountant missed the filing deadline" a defense to the late-filing penalty?
• Is the 90-day Tax Court deadline jurisdictional?
• On what grounds will the IRS accept an offer in compromise?
• Should a taxpayer sign a Form 872 extending the assessment period?
• What alternatives to a full Appeals conference exist?
• What are a taxpayer's three options after receiving a 30-day letter?
• What are the badges of fraud in a tax case?
• What are the elements of criminal tax evasion?
• What are the penalties for filing or paying late?
• What are the procedural prerequisites to a tax refund suit?
• What are the three forums for litigating a federal tax deficiency?
• What are the three types of innocent spouse relief?
• What are the three types of IRS audit?
• What counts as substantial authority for a tax position?
• What does it cost to submit an offer in compromise?
• What does Section 7491(c) do about penalties?
• What duties does Circular 230 impose on a tax representative?
• What examination powers does the IRS have?
• What installment agreement options does the IRS offer?
• What is a Collection Due Process hearing?
• What is a Kovel arrangement and how do you make one work?
• What is an eggshell audit?
• What is an Information Document Request and how should it be handled?
• What is an IRS levy and what procedures must precede it?
• What is a qualified amended return?
• What is a Revenue Agent's Report and a 30-day letter?
• What is a statutory notice of deficiency?
• What is currently not collectible status?
• What is first-time penalty abatement?
• What is often the strongest way to attack IRS guidance?
• What is the accuracy-related penalty under Section 6662?
• What is the biggest danger in a correspondence audit?
• What is the civil fraud penalty?
• What is the Cohan rule?
• What is the difference between cooperation and concession in an audit?
• What is the difference between Form 2848 and Form 8821?
• What is the Flora full payment rule?
• What is the Golsen rule?
• What is the IRS Independent Office of Appeals and why does it matter?
• What is the reasonable cause defense to tax penalties?
• What is the Section 6751(b) supervisory approval defense?
• What is the Section 7525 tax practitioner privilege, and why is it weaker than it sounds?
• What is the Taxpayer Advocate Service and when should you use it?
• What is the trust fund recovery penalty?
• What must the IRS show to enforce a summons?
• What procedural protections apply at an IRS Appeals conference?
• What records is a taxpayer legally required to keep?
• What rights does a taxpayer have in an IRS interview?
• What should a company do in the first month of an IRS examination?
• What should a partnership agreement address about the BBA audit regime?
• What should a taxpayer do when an audit starts to look criminal?
• What should a written protest to IRS Appeals contain?
• When does a federal tax lien arise, and what does it attach to?
• When does reliance on a tax professional excuse a penalty?
• Who bears the burden of proof in a tax case?
• Who may represent a taxpayer before the IRS?
• Why are conflicts of interest especially dangerous in a corporate tax examination?
• Why does the Cohan rule not save travel and meal deductions?
• Why is lying to an IRS agent so much worse than the original tax problem?
• Why is overproducing documents in an audit dangerous?
• Why is the economic substance penalty the harshest in the Code?
• Why should the accountant who prepared the return not defend the audit?
• Why would a taxpayer ever choose to pay first and sue for a refund?