Category Archives: From Live Blog

In Hale v. United States, 2019 U.S. Claims LEXIS 502 (May 14, 2019), the Court of Federal Claims has held that various items of correspondence from IRS to a taxpayer were not notices of disallowance and, thus, did not start the two-year period for initiating a refund lawsuit.

IRC § 6532 establishes jurisdictional time limitations on tax refund suits. A tax refund suit may not be brought until six months after the filing of a tax refund claim with IRS, unless IRS renders a decision before the 6-month period expires. A tax refund suit must be brought within two years from the date IRS mails the first notice of disallowance for a refund claim. (Code Sec. 6532(a)(1))

The taxpayer, Ms. Hale, received the following correspondence from IRS with respect to tax returns she had filed:

1. A letter explaining a mathematical error she had made in calculating her earned income credit on her 2012 return.
2. A letter restating IRS's position that the earned income credit was calculated incorrectly and had been reduced from $3169 to $3069.
3. Letters requesting more information with respect to other tax returns she had filed.

The court held that none of the correspondence that the taxpayer received were notices of disallowance that started the Code Sec. 6532(a)(1) two-year period for filing a refund suit.

The court said, citing Smith v. US, 478 F.2d 398 (1973), that, although a notice of disallowance need not take any particular form, it must adequately notify the taxpayer "of the Commissioner's adverse action" in order to trigger the two-year statute of limitations set forth in Code Sec. 6532.

It also said that internal guidance from IRS suggests that, among other criteria, a notice of disallowance must inform the taxpayer of her "right to file suit" and of the "period in which suit may be filed."

Notices informing taxpayers that IRS needs more information to process a claim, along with math error notices or similar correspondence, typically fail to adequately notify taxpayers of a final adverse action or of their right to file suit within two years. (Chief Counsel Advice 200203002)

Here, none of the correspondence in the record met these criteria for effective notices of disallowance. They did not inform Ms. Hale of her right to sue or of the applicable two-year limitations period.

Have a Tax Problem?

Contact the Tax Lawyers at 

Marini & Associates, P.A. 

 

 

for a FREE Tax HELP Contact Us at:

www.TaxAid.com or www.OVDPLaw.com 

orToll Free at 888-8TaxAid (888) 882-9243

The Internal Revenue Service advised in  IR-2019-99  those now receiving tax bills because they filed on time but didn’t pay in full that there are many easy options for paying what they owe.

These notices, including CP14 and CP501, which notify taxpayers that they have a balance due, are frequently mailed during June and July.

Recent major tax law changes affect most taxpayers, and while the vast majority are receiving refunds, others discovered that they owe tax this year. Many of them may qualify for a waiver of the estimated tax penalty that normally applies. See IRS Form 2210, Underpayment of Estimated Tax by Individuals, Estates and Trusts, and its instructions for details. Taxpayers are reminded to pay as much as possible, as soon as possible to minimize interest and penalties.

Making a payment

Taxes can be paid anytime throughout the year. When paying, taxpayers should keep in mind:

• Electronic payment options are the quickest way to make a tax payment. 
• IRS Direct Pay (bank account) is a free way to pay online directly from a checking or savings account.
• Taxpayers can choose to pay with a debit or credit card. Although the payment processor will charge a processing fee, no fees go to the IRS.
• The IRS2Go app provides mobile-friendly payment options. Taxpayers can use Direct Pay or card payments on mobile devices.
• Taxpayers can pay using their tax software when they e-file. For those using a tax preparer, they can ask the preparer to make the tax payment electronically.
• Taxpayers may also enroll in the Electronic Federal Tax Payment System and have a choice of using the internet or phone and using the EFTPS Voice Response System.

Those who can’t pay in full have several options see our prior posts: 

• Know Your Choices to Pay Your Tax Bill! - Part 1 and
• Know Your Choices to Pay Your Tax Bill! - Part 2 

 Check tax withholding

For many taxpayers, this year’s unexpected tax bill could have been avoided with a Paycheck Checkup. The IRS urges all taxpayers to check their withholding for 2019, including those who made withholding adjustments in 2018 or had a major life change. Those most at risk of having too little tax withheld from their pay include taxpayers who itemized in the past but now take the increased standard deduction as well as two-wage-earner households, employees with non-wage sources of income, and those with complex tax situations.

 

Taxpayers can figure out the appropriate withholding to their paychecks with the IRS’s Withholding Calculator on IRS.gov. It’s never too early to check withholding.

Need Time To Pay Your IRS Taxes?  

   

Contact the Tax Lawyers at 
Marini & Associates, P.A. 

 

 

for a FREE Tax HELP Contact us at:

www.TaxAid.com or www.OVDPLaw.com or

Toll Free at 888-8TaxAid (888) 882-9243

 



 

 

The Internal Revenue Service announced today that the Spring 2019 Statistics of Income Bulletin is now available on IRS.gov. The SOI Division produces the online Bulletinquarterly, providing the most recent data available from various tax and information returns filed by U.S. taxpayers. This issue includes articles on the following topics:

• Sole Proprietorship Returns, Tax Year 2016--For Tax Year 2016, taxpayers reported nonfarm sole proprietorship activity on approximately 25.5 million individual income tax returns, a 1.2-percent increase from 2015. Profits fell to $328.2 billion in 2016, a 1.1-percent decrease from the previous year. In constant dollars, total nonfarm sole proprietorship profits decreased 2.4 percent in 2016. Total profits as a percentage of business receipts were 23.1 percent for 2016, the second highest level in this data series which begins in 1988. The largest percentage increase in profits was reported by the arts, entertainment and recreation sector which increased 19.6 percent or $1.9 billion.

• Partnership Returns, Tax Year 2016--The number of partnerships in the United States continued to increase for Tax Year 2016. Partnerships filed more than 3.7 million returns for the year, representing more than 28 million partners. The real estate and leasing sector contained almost half of all partnerships (49.9 percent) and over a quarter of all partners (29.7 percent).

 Need Tax Help?

 

Contact the Tax Lawyers at 

Marini & Associates, P.A. 

 

 

for a FREE Tax HELP Contact Us at:

www.TaxAid.com or www.OVDPLaw.com 

orToll Free at 888-8TaxAid (888) 882-9243