Roz Strategies September October 2019

PRACTICE CORNER FROM THE

Former National Taxpayer Advocate, Nina Olsen, created the map below before leaving office. The map was created in hopes of helping taxpayers find their way —when actually, it reveals the absolute need for professional help and is a gift to Practitioners. This map illustrates, at a very high level, the stages of a taxpayer’s journey, from getting answers to tax law questions all the way through audits, appeals, collection, and litigation. It shows the complexity of tax administration, with its connections, overlaps, and repetitions between stages. As you can see from its numerous twists and turns, the road to compliance isn’t always easy to navigate. “The Taxpayer Roadmap 2019” (which is more confusing than the New York City subway system) is supposed to

help taxpayers navigate the maze known as the Internal Revenue Service. This is a great visual to demonstrate to potential clients just how difficult it is to resolve a tax problem. Now, if a potential client says, “I think I can just do this on my own,” give them a copy of the map and wish them good luck. Get a copy of the map at www.TaxpayerAdvocate.irs.gov. I would print the map, as many of our members have, and use it in your marketing. Having this blown up and strategically placed in your lobby or conference room is a great way to remind prospects they’ll get creamed if they attempt to do this on their own.

–Michael Rozbruch

The Taxpayer Roadmap 2019 An Illustration of the Modern United States Tax System

Themapbelow illustrates,ataveryhigh level, the stagesofa taxpayer’s journey, fromgettinganswers to tax lawquestions,all theway throughaudits,appeals,collection,and litigation. It shows thecomplexityof taxadministration,with itsconnections andoverlapsand repetitionsbetween stages.Asyoucan see from itsnumerous twistsand turns, the road tocompliance isn’t alwayseasy tonavigate.Butwehope thismaphelps taxpayersnd theirway.Aprojectof theTaxpayerAdvocateService. Formore informationvisit taxpayeradvocate.irs.gov

KEY

Taxpayer BeginsFiling Process

Tax Return Preparation

Tax Return Processing

Exam

SCREENINGSTATION

PROCESSING STATION

RETURNORCLAIM ISSCREENEDFOREXAM

IRSCorrects Errorsand PostsReturn

WereErrors Foundon Return

Stops

Identity Verified

Refund Claim

ReturnMailed

YES

RETURN IS ACCEPTEDFOR PROCESSING

IDTheft Filters

TaxNotice

IRS Issues MathError Notice

Taxpayer FilesReturn onPaperandSubmits Payment IfDue

Field Exam

Office Exam

YES

Taxpayere-FilesandSubmits Payment IfDue

AutomatedProcess

Correspondence Exam

LetterNotifyingTaxpayer ofAuditWithRequest for Additional Information

FileElectronicallyorPaper

Return Passes Filters

Free File/Free File Fillable Forms Volunteer IncomeTax Assistance /Tax Counseling for theElderly

Action/Decision

IRSPosts Return

ReturnProcessing Stopped,Notice Issued

Balance DueReturn

Appointment Scheduled

DidQuestioned CreditsGetVerified AutomatedQuestionable Credits (AQC)

End/CaseClosed

Return Rejected

TaxpayerAddresses e-FileErrorsandRefiles

No ID Theft Filters

Exam LetterNotifying TaxpayerofAuditWith Request forAdditional Information

IRSCorrects Errorsand PostsReturn

Commercial TaxSoftware

TaxpayerReceives andGathersTax Information

Appointment Confirmation

Return Reviewedby IRS for Questionable Items

InitialContact CombinedWith30 ‐ Day LetterandReport

YES

WereErrors Foundon Return

Process

PaidReturnPreparer

YES

TaxpayerProvides Documentationof Requested Information

Taxpayer PreparesReturn

DecisionPoint

NoChange inTax (WithorWithout Adjustments)

IRS Issues MathError Notice

TaxpayerEstimates TaxDueandSubmits Payment

IRS Fully AcceptsTaxpayer Documentation

IRSPosts Return

YES

Choice

90-Day Notice Letter

Does Taxpayer Owe

IRS Fully AcceptsTaxpayer Documentation

YES

Account Adjusted

TaxpayerAgrees WithProposedChanges

Taxpayer FilesExtension forMoreTime

TaxpayerSeeksAnswers toTaxQuestions

Station’sDepartures

ASSESSMENT STATION

CanTaxpayer FileReturn byDeadline

AuditReport/Letter GivingTaxpayer 30 D ays toRespond

AuditReport/Letter GivingTaxpayer 30Days toRespond

WereWages &Withholding Verified

YES

Payment Options

NoticeofClaim Disallowance

Account Adjusted

Station’sArrivals

TAXPAYER’SBALANCE ISASSESSED

YES

TaxSoftware

TaxpayerDoesn't AgreeandRequests AppealsConference

Taxpayer DoesNot Respond

TaxReturn Preparers

IRSTaxpayer AssistanceCenters (TACs)

LineDirection

90-Day Notice Letter

IRSTax Law Phone Line

IRS Formsand Publications

IRS.gov

TaxpayerDoesNot PetitionTaxCourt Hearing

TaxpayerTimely PetitionsTaxCourt Hearing

RefundDue toTaxpayer

Lines

No Further Action

NoBalanceDue to IRSbyTaxpayer

IRSOffsets for IRSDebts

Balance Due to IRS byTaxpayer

CaseReturns to IRSor IRS RecallsCase

TaxPreparation

Bureauof Fiscal Service (BFS)Offsets forNon-TaxDebts

TaxpayerCalls IRS toDiscuss CollectionAlternatives

ACTION STATION

DoesTaxpayerPay BalanceDue

TaxReturnProcessing

Refund, IfAny, Issued toTaxpayer

YES

TAXPAYERDISAGREES WITHASSESSMENT

Collections

SORTINGSTATION

Collections

Taxpayer DisagreesWith AssessedAmount

IRSCATEGORIZES TAXPAYER’SCASE

Balance Paid

IRSSendsTaxpayer CollectionNotices

Exam

CaseClosed

Taxpayer FilesOffer in Compromise (DoubtAs to Liability)

Taxpayer DoesNot PayTaxes

Taxpayer PaysTaxes

CaseNot Assigned (Shelved)

TaxpayerTimely Files InnocentSpouseClaim

NoticeofTaxDue andDemand for Payment

Appeals

Noticeof Federal Tax Lien Filed (inPublicRecords)

Noticeof Lien Filedand Right toCollectionDue ProcessHearing

PRIVATEDEBT COLLECTION

CaseWaiting forAssignment (Queue)

YES

Taxpayer RequestsRefund

Litigation

TaxpayerRequests CollectionDue ProcessHearing Within30Days

Automated Collection System

TaxpayerTimely Files Request forRefund

YES

Field Collection

TaxpayerRequests AuditReconsideration

PrivateDebtCollection

Refund From AnotherYear Applied toDebt

YES

Noticeof Intent to Levy andRight toCollectionDue ProcessHearing

Equivalent Hearing (Request Within1Year)

Installment Agreement

CollectionAppeals Program

Government FilesSuit inCourt

ReduceAssessment to Judgment

Foreclosureof Tax Lien

90-DAYNOTICELETTER NoticeGivingTaxpayer90Days toPetitionTaxCourt (150Days IfOutsideUnitedStates)

Litigation

Full Payment

ALTERNATIVESSTATION

LITIGATIONSTATION

TAXPAYERCOLLECTIONALTERNATIVES

FILEDBYTAXPAYER

Lien Enforcement

Action to Enforce Levy

Wrongful Levy

How toAddressa Levy

Returnof LevyProceeds

90-Day Notice Letter

LevyRelease (WithEconomicHardship)

InstallmentAgreement

GeneralClaims Taxpayer CanBring

PartialPay InstallmentAgreement

COLLECTION STATION COLLECTIONACTIONS

Taxpayer Files For

90-Day Notice Letter

CurrentlyNotCollectible

Taxpayer Petitions TaxCourt

Noticeof RefundClaim Disallowanceor 6MonthsSince RefundClaim Filed

Bankruptcy in FederalCourt

Bankruptcy (Insolvency)

YES

InnocentSpouse ClaimNot RaisedonAudit

Taxpayer Files TaxCourt Petition

TaxpayerDisagreesWith AssessedAmount

Case Settled

Levy/Seizure ofAssets

EffectiveTaxAdministration (Equity,PublicPolicy,EconomicHardship)

PayTaxDue in Full Offer inCompromise

DoubtAs to Collectibility

DoubtAs to Liability

Reviewof CollectionDue Process Determination

Taxpayer Files Petition in FederalCourt

TaxpayerRequests CollectionAppeals Program

Previous IRSAppeal

WithdrawalofNotice of FederalTax Lien

LienDischarge

LienSubordination

LienRelease

How toAddressa Lien

Appeals Consideration

LITIGATION STATION

ASSESSMENT STATION

Request for Interest Abatement

YES

Administrative Costs

Taxpayer OwesTax

FederalCourt Decision

TaxCourt Decision

AppealsAgrees WithTaxpayer

MATHERRORNOTICE

TAXPAYERFILESAPPEAL ORCLAIMREQUEST APPEALSTATION

AppealsConsiders RiskofGoing to Court (Hazards of Litigation)

TaxpayerProtests 30-Day Letter

Face-to-Face orTelephone Conference

TaxAssessed

MathError Notice

TaxpayerAgrees WithAppeals

YES

TaxpayerAppeals RefundClaimDenial

TaxpayerPrevails andGovernment DoesNotAppeal

90-Day Notice Letter

NoAgreement orPartialAgreement

TaxpayerOwesTax andDoesNotAppeal

Taxpayer AgreesWith Adjustment

Appeals

AppealsConsiders RefundClaim

YES

SettlementWith Reservations (PartialAgreement WithUnresolved Issues)

Taxpayer Files CollectionDue Process (CDP) HearingRequest Within30Daysof CDPNotice

TaxAssessed

TaxpayerClaims Refund

Adjustment Remains inPlace

Taxpayer Files CollectionAppeals Program (CAP) Request

TaxpayerPetitions FederalCourt

Taxpayeror GovernmentAppeals

AppealsAgrees WithTaxpayer

YES

NoticeofPartial or FullClaim Disallowance

Federal AppealsCourt

TaxpayerRequests Abatementof AdjustmentWithin 60Days

Taxpayer Files PetitionWithin30Days ofCollectionDue Process (CDP) Determination Letter

Appeals Conference

YES

Taxpayer Files EquivalentHearing RequestWithin 1YearofCDPNotice

AppealsDoesNot AgreeWithTaxpayer

Appeals Determination

Appeals Issues CollectionDue ProcessDetermination Letter

FederalAppeals CourtDecision

YES

AppealsAgrees WithTaxpayer

Adjustment Remains inPlace

Taxpayeror GovernmentAppeals

Adjustment Abated

Face-to-Face orTelephone Conference

AppealsConsiders: •WereAllAdministrative/Legal

Requirements Followed •CollectionAlternatives • InnocentSpouseRelief •BalancingTest -WhetherGovernment’s Interest inEfficientlyCollectingTax IsNoMore IntrusiveThanNecessary

AppealsDoes NotAgreeWith Taxpayer

Appeals Issues Equivalent Hearing Letter

AppealsAgrees WithTaxpayer

TaxpayerPrevails

UnitedStates SupremeCourt

TaxpayerOwesTaxes

EXAM STATION

888.670.0303 • 3

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