Minnie, your tax client, has decided to dispute the Revenue Agent’s Report. List and discuss at least four of your next steps as you prepare to represent Minnie concerning her tax issue within the IRS and in the courts.
What will be an ideal response?
Carrying out a level of due diligence in preparing for such a proceeding is part of the tax professional’s responsibility in representing the client.??
| ? | Make certain that both sides agree on the issues to be resolved in the audit. The goal here is to bring closure to the agent’s list of open issues. |
| ? | Identify all of the facts underlying the issues in dispute, including those favorable to the IRS. Gather evidence to support the taxpayer’s position, and evaluate the evidence supporting the other side. |
| ? | Identify current tax law authorities as they bear on the facts and open issues. Remember that the IRS agent is bound only by Supreme Court cases and IRS pronouncements. Determine here the degree of discretion that the IRS is likely to have in disposing of the case. |
| ? | Prepare a list of points ranging from those bearing little weight to the core principles upon which the taxpayer’s case may rest to those supporting and contradicting that position. Short research memos will be useful as well in the discussion with the agent. Pro taxpayer points should be mentioned during the discussion and “entered into the record.” |
| ? | Prepare tax and interest computations as to the effects of points that are in dispute so that the effects of closing or compromising an issue always can be determined. |
| ? | Determine a litigation point (i.e., at which the taxpayer’s position will be withdrawn from further audit negotiation and taken to the courts). This position should reflect the dollars of tax, interest, and penalty involved, the chances of prevailing in various trial-level courts, and other strategies discussed with the taxpayer. One must have an end game strategy for the audit, and thorough tax research is critical in developing that position in this context. |
You might also like to view...
In examining customers during the IMC planning context analysis, the easiest group to study is:
A) current customers B) former customers C) potential new customers D) competitors' customers
The net effect to a corporation of the declaration and payment of a cash dividend is to
A) decrease assets and decrease stockholders' equity B) decrease liabilities and decrease stockholders' equity C) increase stockholders' equity and decrease liabilities D) increase assets and increase stockholders' equity
Income on which the payment of taxes is postponed until some future date is called
A) tax-delayed. B) tax-deferred. C) tax-postponed. D) tax-tardy.
Shoe Sunshine, Inc filed for bankruptcy protection under Chapter 11 and submitted a plan of reorganization within 120 days after filing for relief. Two of the classes of creditors voted against the plan. However, the bankruptcy judge considered the plan to be feasible, fair, and in the best interests of the creditors; it approved it in spite of these creditors' objections. This action by the
judge is called a "cramdown." Indicate whether the statement is true or false