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Flashcards in Taxes: Tax Practice & Procedure Deck (2)
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Tax Practice & Procedure
Audit Process

Audit Process
1. review of returns for error and matching info from W-2. All returns classified as individual, corporation, partnership, fiduciary, etc.
3. each return is scored
4. statute of limitations: 3 years from
- date filed or
- due date of return with 2 exceptions
- 6 years if gross omissions >25% GI
- no statue of limitations if fraud
5. audits conducted in IRS office of field
6. taxpayer may appoint qualified individual to represent them before IRS
7. IRS can summon taxpayer's records & witnesses to testify
8. IRS findings reported in "Income Tax Exam Changes Report"
9. disagreements may arise from questions of fact or law
10. IRS will be consistent with sources of law
11. IRS and taxpayer can negotiate
12. if taxpayer agrees to "Revenue Agent's Report", no appeals
13. once deficiency paid, appeal through US District Court or US Claims Court
14. no agreement, get 30-day letter
15. IRS encourages taxpayer to agree to RAR
16. IRS Issues a no-change report after audit, then cannot reopen unless fraud


Tax Practice & Procedure
Appeals Process

Appeals Process
1. written protest must be filed
2. must explain taxpayer's position
3. IRS not required to grant appeal
4. new issues may not be raised by IRS during appeal
5. appellate conference is informal
6. if case is settled, form 870-AD is signed
7. if taxpayer does not respond to 30-day letter, 90-day letter is issued
8. taxpayer must file a petition with Tax Court
9. once petition filed, IRS cannot issue notice of deficiency

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