IRS Extending the Tax Assessment Period
Your Available Options (Part II)
When asked to sign the consent extending the statutory period, you have three options with rights and alternatives for each. You have the right to:
· Refuse to sign the consent –Taxes other than certain employment taxes and certain miscellaneous excise taxes. If you choose not to sign the consent, the IRS will take steps that will allow them to assess any tax they determine to be due. These steps begin with the issuance of a formal notice (see Notice of Deficiency, below, or Notice of Employment Tax Determination Under IRC §7436, below, for explanation). This notice neither requires that you make an immediate payment, nor that you immediately take your case to the Tax Court. The notice gives you 90 days (150 days if the notice was addressed to a person outside the United States) to either agree to the deficiency or employment tax liability, or file a petition with the United States Tax Court for a redetermination of the proposed deficiency or employment tax liability.
If you petition the Court, you will generally have the opportunity for a pretrial settlement. If agreement cannot be reached, the case will be heard in court. Whether or not you signed a consent to extend the assessment statute of limitations will have no bearing on who has the burden of proof in any court proceeding. (continued next week)
IRS Publication 1035 (TTT 04/27/2021