Here’s one that will change the way you look at the court system! In America we believe that everyone should have their day in court. Right?
Here is an interesting case. A husband and wife came in for some help with a tax court petition that they had filed. They were previously tax protesters and had filed zero returns and statements that indicated that the tax system was illegal. The IRS reversed the returns and added all income with no regards to their deductions to the return. They didn’t allow business expenses nor did they allow any personal itemized deductions and then sent them a really BIG tax bill.
In response to this large bill, the husband and wife both filed appeals with the IRS. Of course the IRS appeals agent wasn’t very sympathetic to their cause and instead of granting them any form of relief, charged the couple with a $5000.00 penalty for a frivolous appeal!
The good news for the couple is that they had submitted the appeal as a Collection Due Process Appeal. This appeal is in response to the ALL IMPORTANT letter called a Form 1058 “Final Notice of Intent to Levy”.
This critical letter is the only option in a collection case to get to tax court for review. The IRS cannot levy you without first sending you this letter. When you receive a Form 1058 you have 30 days within which to file an appeal. If you miss this important 30 day window, the IRS has to wait another 15 days just in case the appeal is “in the mail”. The 30 day deadline is set by law; if you are late, you lose your right for court oversight of any IRS decision. After this the IRS can seize, levy and garnish!
The bad news is that the IRS wrote a letter that the Tax Court has heard this issue before, and the court system has already decided that issue, so they asked the court to kick the case out as frivolous. At issue, of course, is whether the tax system was legal and the IRS had the right to collect taxes.
The tax court agreed with the IRS and kicked the case out without a trial. I was surprised.
To add injury to insult, the Tax Court then FINED them $25,000 EACH for filing a frivolous tax court petition!
This is the point at which they came to see me. Now the total balance of the taxes, the penalties, and the interest on all of it was legally due and the IRS could levy, garnish and seize property! Bummer. Just the appeals penalty and tax court penalties totaled $60,000!
Fortunately we were able to get the penalties waived for them. I spoke with a very nice attorney that had worked the case for the IRS and she agreed to write a letter to the judge asking for the penalty to be waived.
Feel free to contact us, or check us out on Facebook (Advanced Tax Solutions) to read more about our company and some of the different solutions that are available. Or call for an appointment and let us help you! Let’s get started today! 303-753-6040 Ex 296