Abatements and Reconsiderations
When a tax debtor fails to meet his or her federal tax obligations, he or she may too often assume that the taxes originally assessed were done so in the appropriate manner. However, this is often not the case, and in recognition of this fact the Internal Revenue Service (IRS) has been provided with authority to reduce or “abate” taxes on the grounds that they have been assessed improperly, either in whole or in part. Specifically, IRC § 6404(a) provides: “The Secretary is authorized to abate the unpaid portion of the assessment of any tax or any liability in respect thereof, which is excessive in amount, or is assessed after the expiration of the period of limitation properly applicable thereto, or is erroneously or illegally assessed.” Internal Revenue Service, Internal Revenue Manual, 220.127.116.11 (10-09-2012), Tax Abatements – Internal Revenue Code and Regulations, available at https://www.irs.gov/irm/part5/irm_05-001-015r.html. In other words, if the assessment of federal taxes is excessive, or is assessed more than ten years from the time the taxes originate from, then the tax can be abated.
A reconsideration of the taxes assessed occurs when the IRS receives some kind of information relating to the taxes in question not previously considered following the insurance of a final determination. This information must of course be information that was not previously considered, as it must lead the IRS to conclude that the assessment was improper based on incomplete information retained at the time the taxes were assessed. Reconsiderations come in three forms: an Audit Reconsideration, an AUR Reconsideration, or a SFR/ASFR Reconsideration. An Audit Reconsideration is an IRS process used to reevaluate the results of a prior audit which formed the basis for the previously assessed taxes. An AUR Reconsideration is a claim for a tax refund or a tax credit that was not previously granted to the taxpayer, or an abatement request relating to taxes, penalties or interest. An SFR/ASFR Reconsideration situation arises where a person or business fails to file a return; in such cases, the IRS computes taxes, penalties and interest using Information Report Program (IRP) data in order to reconsider the taxes assessed.
For more information relating to tax abatements and reconsiderations, you should consult an experienced tax professional who can more effectively answer your questions, and assess the likelihood of a strategy involving abatements, reconsiderations, or some other remedy for improperly assessed taxes for which you as taxpayer should not be responsible.
Please keep in mind the information and advice presented in this blog is not intended to be used as formal legal advice. Contact a tax professional for personalized tax advice pertaining to your specific situation. While we try and answer all parts of the question when we write our blogs, sometimes there may be some left unanswered. If you have any questions about your problems with the IRS, SBOE, FTB, or BOE, or tax law in general, call RJS Law at (619) 595-1655.