What is the Taxpayer Advocate Service?

The Taxpayer Advocate Service is an independent organization within the IRS whose employees assist taxpayers who are experiencing economic harm, who are seeking help in resolving tax problems that have not been resolved through normal channels, or who believe that an IRS system or procedure is not working as it should. You may be eligible for Taxpayer Advocate Service assistance if:

You are experiencing economic harm or significant cost (including fees for professional representation),

You have experienced a delay of more than 30 days to resolve your tax issue, or

You have not received a response or resolution to the problem by the date that was promised by the IRS.

The service is free, confidential, tailored to meet your needs, and is available for businesses as well as individuals. There is at least one Local Taxpayer Advocate in each state, as well as in Puerto Rico and the District of Columbia. Because they are part of the IRS, Advocates know the tax system and how to navigate it. If you qualify, you will receive personalized service from a knowledgeable Advocate who will:

Listen to your situation,
Help you understand what needs to be done to resolve it, and
Stay with you every step of the way until your problem is resolved.

Contact the Taxpayer Advocate Service.

Additional resources:
Taxes – What You Need to Know – Responsibilities & Benefits!
Have a Tax Problem? Need Help?
What Can I Expect From The Taxpayer Advocate Service?
What Information Should I Provide To The Taxpayer Advocate Service?
What is Systemic Advocacy?

Tax Debt Help - Take Notice of the Notice!

Do you need to see what an IRS notice says, but don't have it in front of you? If you know the notice number, you can look up its purpose, basic message, possible enclosures, and other useful details. And if you have the tear-off stub from the last page, you can use the information printed on it to see some of the variable content included in that notice.

How To Identify Your NoticeThe notice number prints on the top of the first page of all our notices and on the lower left-hand side of the tear-off stub included with most of them. That number identifies the message we deliver in every notice. While the contents may vary somewhat, every notice with the same number has the same basic purpose.

CP Number Notice Title

CP 12 Math Error - Overpayment of $1 or more
CP 14 Balance Due, No Math Error
CP 49 Overpaid Tax Applied to Other Taxes You Owe
CP 90 Final Notice - Notice of Intent to Levy and Notice of Your Right to a Hearing
CP 91 - CP 298 Final Notice Before Levy on Social Security Benefits
CP 161 No Math Error, Balance Due
CP 501 Reminder Notice - Balance Due
CP 504 Urgent Notice - Balance Due
CP 523 Notice of Default on Installment Agreement
CP 2000 Notice of Proposed Adjustment for Underpayment/Overpayment

If My Notice Isn't Listed:

You'll find useful information here about many of the notices we send, including the purpose of the notice, the reason we send it, and a list of enclosures we might include with it. There's also sample content for each. Since parts of our notices vary depending on account conditions, the samples may not exactly match the notices we mail. The basic message, though, will be the same.
Individual Filer Notices

Notices we send about Form 1040, 1040A, or 1040EZ, or any schedules, forms, or attachments included with it are Individual Filer Notice.

Business Filer Notices

Notices we send about business-related tax forms such as Forms 941, 1065, and 1120, are Business Filer Notices.

What To Do When You Disagree

If your notice is listed above, follow the link for advice on handling disagreements with the notice. In general though, you need to contact IRS at the contact number provided on the notice to explain why you disagree. If that doesn't result in your satisfaction, the Taxpayer Advocate may be able to assist.

Tax Debt Help - Time Is of The Essence!

The IRS has three years to give you a refund, three years to audit your tax return, and ten years to collect any tax due. Together, these laws are called the statute of limitations. They put time limits on various tax-related actions that you and the IRS can take.

You have 3 years to claim a tax refund.This is measured from the original deadline of the tax return, plus three years. For example, your 2004 tax return was due on April 15th, 2005. 2005 plus 3 is 2008. You have until April 15th, 2008, to file your 2004 tax return and still get a tax refund. File your 2004 return after April 15th, 2008, and your refund "expires." It goes away forever. This is called the statute of limitations for claiming a refund.

The tax code says that you have three years from the original filing deadline to claim a refund.
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Please file your 2004 tax returns on or before April 15th, 2008, so that your refunds are not lost forever.

The IRS has 3 years to audit your tax return or to assess any additional tax liabilities.This is measured from the day you actually filed your tax return. If you filed your taxes before the deadline, the time is measured from the April 15th deadline. For example, you filed your 2006 tax return on February 15th, 2007. The 3-year time period for an audit begins ticking from April 16th, 2007, (the filing deadline) and will stop ticking on April 16th, 2010. On April 17th, 2010, the IRS cannot audit your 2006 tax return unless there is a suspicion of tax fraud.

The IRS has 10 years to collect outstanding tax liabilities.

This is measured from the day a tax liability has been finalized. A tax liability can be finalized in a number of ways. It could be a balance due on a tax return, an assessment from an audit, or a proposed assessment that has become final. From that day, the IRS has ten years to collect the full amount, plus any penalties and interest. If the IRS doesn't collect the full amount in the 10-year period, then the remaining balance on the account disappears forever. The statute of limitations on collecting the tax has expired.

Example of the Statute of Limitations

Let's provide an example based on a real-life scenario. Mr. Smith wants to file 6 years of tax returns: 2001 through 2006. All years he has refunds. If he files by April 15th, 2007, Mr. Smith will receive refunds for his 2003, 2004, 2005, and 2006 tax returns. His refunds for 2001 and 2002, however, have expired.

Let's change the example slightly. Mr. Smith wants to file 6 years of tax returns: 2001 through 2006. In 2001 and 2002, he could have received a refund. In 2003, 2004, and 2005, he owes. Mr. Smith cannot apply his 2001 or 2002 refunds as an estimated tax payment towards his 2003 taxes. His refunds have expired. For the 2003 to 2006 tax returns, the IRS has ten years to collect the full tax, plus penalties and interest, from the date Mr. Smith actually files the returns. If Mr. Smith has a refund for 2006, that refund will be used to pay off his tax debts.
Action Plan ItemIt is in your best interest to file your tax returns at your earliest possible convenience. First, you can claim refunds. Second, it starts the clock ticking on the 3-year statute for audits and the 10-year statue for collections.

Tax Law References

Internal Revenue Code, Section 6501 (3-year audit statute),
Section 6502 (10-year debt collection statute), and
Section 6511 (3-year refund statute). For more information on how the IRS manages these statute of limitations, see Internal Revenue Manual, 25.6.1, Statute of Limitations.

Back Taxes Resources

Back Taxes EssentialsIRS AssessmentsIRS Penalties

Tax Debt Resources

Installment Agreements

Offer in Compromise

Partial Payment Agreements

Tax Help - Even Businesses Need Those Deductions

Business owners often pay more tax than needed. Why? Well, it’s basically the same principal as individual taxpayers, they miss deductions that they might have taken but was not aware of or didn’t figure applied to them.

Some common business deductions for which you might be eligible and maybe have never considered are listed below. As with any deduction, there can be restrictions that need to be considered before including them in your return.

Carrying Charges

Carrying charges are fees and interest on property. Some carrying charges may be deductible if they are not capitalized (counted as long-term expenditures).

Research and Experimental Costs

Costs of research and experimentation may be deductible if you choose not to list them as capital (long-term) expenses.

Circulation Costs

If you have a publishing business, you may be eligible to deduct costs for circulating a newspaper, magazine, or other periodical. This deduction does not apply to land or property.

Environmental Cleanup Costs

You may be eligible to deduct costs for cleanup of environmental spills or other incidents, up to January 1, 2008. These costs are considered as “Other Deductions.”

Business Startup and Organization Costs

You may be eligible to deduct some of your business startup costs up to $5,000 and organizational costs up to $5,000 (for expenses after October 22, 2004). If your startup or organizational costs exceeded $50,000, your deduction may be limited.

Disability Access Costs

If you make improvements or remodel your business facility to accommodate customers and employees, you may be eligible for a deduction for these expenses. The annual limit for these deductions is $15,000.

For more information, including any restrictions and details on these deductions, see IRS Publication 535.

Related Articles:

“The Cost of Doing Business”
Domestic Production Activities
Environmental Cleanup
Access for the Disabled - Tax Benefits for Businesses Accommodating Persons with Disabilities