How to Get a Ruling From IRS on Tax Credit Issue
The U.S. tax code is lengthy and complicated, and understanding which credits apply to your financial situation can be difficult. The IRS provides several ways for taxpayers to get a ruling on tax credit issues. If possible, resolve your questions before filing your return. After filing, the IRS has a formal appeals process and offers support through the Taxpayer Advocate Service. Further appeals can be made to the U.S. Tax Court, the U.S. Circuit Court of Appeals and finally to the U.S. Supreme Court.
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Instructions
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Before Filing
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Search the IRS Web site (see Resources) for information on allowable tax credits for your filing status and circumstances, and to identify any restrictions applied to the allowability of tax credits.
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Consult a certified public accountant (CPA) or tax professional for advice on your tax credit issue. In addition to interpreting the Internal Revenue Code, CPAs and tax professionals can access the full set of court cases, Treasury regulations, Chief Counsel advice, revenue rulings, revenue procedures, private letter rulings and IRS announcements that impact rulings from the IRS on tax credit issues.
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Call the IRS and request clarification on your issue. Agents are required to deal with taxpayers in a professional, fair and courteous manner, according to IRS Publication 1, Your Rights as a Taxpayer.
After Filing
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File Form 12203, Request for Appeals Review, to request a review of adjustments, including tax credit issues, proposed by the IRS if the total value of adjustments is less than $25,000 in one year.
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Prepare a formal written protest for adjustments greater than $25,000 in one year, and for all employee plans, exempt organization, partnership and S corporation cases. Include the following: name, address, Social Security number, and telephone number; a copy of the letter notifying you of the proposed changes and a statement that you are appealing an IRS finding; the tax periods or years involved; a list of the changes you disagree with, why you disagree and provide facts or cite the law or authority that supports your position; and sign the protest.
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Mail Form 12203 or the formal written protest to the IRS office that sent the letter requiring the adjustments you disagree with. The Appeals office is independent from other IRS offices and you should expect a reply regarding your tax credit issue within 90 days after filing the request.
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Contact the Taxpayer Advocate Service within the IRS if you believe that the appeals process isn't working properly, or if you are experiencing financial difficulty as a result of challenging tax credit issues.
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File a petition with the U.S. Tax Court to dispute a tax credit issue that has not been resolved through the appeals process. Trials are conducted without a jury and before one judge. Taxpayers may represent themselves, but should consider obtaining competent representation from a tax expert.
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File an appeal with the U.S. Circuit Court of Appeals if you disagree with the Tax Court's ruling.
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File an appeal with the U.S. Supreme Court if you disagree with the Circuit Court's ruling on your tax credit issue.
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Tips & Warnings
Be aware that penalties and interest will continue to accrue on any unpaid amount even when you have filed an appeal with the IRS.
