Received a letter from the IRS?
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The Taxpayer's Arsenal: Knowing Your Rights is Power
The Right to Be Informed
If an IRS notice is unclear, you can demand a clear explanation. This is the first step in shifting the burden of proof back to the IRS.
The Right to Challenge
If you disagree with an IRS decision, you can challenge it in a timely manner with evidence. Prepare all your documents meticulously.
The Right to Appeal
You can request a fair hearing with the IRS Independent Office of Appeals. This is your best chance to resolve disputes without litigation.
The Right to Finality
There are legal time limits for the IRS to audit you or collect tax. Understanding this 'statute of limitations' is crucial.
The Art of Penalty Abatement
Penalties can be larger than the tax itself. The right strategy can save you a significant financial burden. Find the option that fits your situation.
1. First-Time Abatement (FTA)
If you have a clean compliance history for the past three years, you can use your "get out of jail free" card.
- ✓**How to request:** A simple phone call often works.
- ✓**Burden of proof:** None (IRS verifies your record).
- ✓**Key condition:** 3 years of clean compliance history.
2. Reasonable Cause
For when you can prove that circumstances beyond your control (illness, disaster, etc.) prevented you from complying.
- ✗**How to request:** Requires detailed written explanation and proof (Form 843).
- ✗**Burden of proof:** High (medical records, court orders, etc.).
- ✗**Key condition:** Proving you exercised 'ordinary business care'.
Strategic Choice:
FTA is easy to use, but it may be a once-in-a-lifetime opportunity. If you have a strong 'Reasonable Cause' argument, it might be better to argue that first and save your FTA card for the future.
Advanced Strategy: The Battle Against the CSED Clock
The IRS has 10 years to collect a tax debt (the CSED). But certain actions can pause this clock. Understand the interaction and act strategically.
Click the buttons below to see how each action affects the 10-year collection clock: