October 15, 2012
IRS Audits: Does Seeking Fast-Track Settlement Make Sense?
IRS audits are hardly an experience that anyone would seek out. For individuals and businesses alike, it can be time-consuming and laborious to satisfy the agency’s scrutiny. Naturally, it can also be stressful, with the potential risk of tax penalties or even criminal tax charges.
If, however, an IRS audit is already on the table, it makes sense to have a sound strategy for approaching it.
Of course, this does not necessarily mean accepting IRS attempts’ to nudge you into participating in a particular program. Consider, for example, the current efforts by the IRS to get businesses to step forward for a fast-track settlement program.
The IRS says that the program cuts down on both the time and the cost involved in resolving tax disputes. Paul DeNard, an IRS deputy commissioner, asserts that the program can lead to resolution in 90 days or less in appropriate cases.
“If you have not been offered fast-track, ask,” DeNard said earlier this month. “If the exam team says not, they should tell you why. If you you’re not happy with the answer, go to a manager. I would encourage all taxpayers to at least ask,” he added.
To be sure, it often pays to be proactive. But make sure you are getting sound tax advice from a respected adviser before jumping into a program you’re not entirely sure about. In order for a fast-track resolution to be in your interest, you should have a clear goal about what you’re looking for.
In fact, this reasoning applies to the IRS side of things as well. If either side believes the other is completely wrong, a quick settlement may not be in either party’s interest.
Source: “Accounting Makeover for Global Companies Seen Within U.S.: Taxes,” Bloomberg, Alison Bennett and Heather Rothman, 10-5-12