Reputable tax professionals make it their mission to deliver mistake free filings for their clients and avoid undesirable actions on the part of the IRS. In the rare circumstance that you, or your business, should find yourselves under federal scrutiny for a recent tax filing, it is essential that you have the right team in your corner to help navigate the different administrative proceedings and actions the IRS can take against you. Below is some information to help individuals and businesses know what to expect when dealing with an IRS initiated mediation or arbitration.
Understanding Mediation and Arbitration
In 1996 the U.S. Congress passed the Administrative Dispute and Resolution Act. The Act requires all administrative divisions of the federal government, including the Internal Revenue Service, to provide mediation or arbitration options to individuals and businesses in lieu of potentially more severe court cases. Prior to pursuing legal action, the IRS offers several options to resolve tax disputes and issues, neither of which can be used by individuals or businesses which have previously been required to appear in a court of law for a tax related issue.
Types of Proceedings
The IRS offers two programs for resolving tax disputes: Voluntary Binding Arbitration, and Mediation. The following sections detail some of the specifics of these programs
Voluntary Binding Arbitration
Individuals and businesses facing off against the IRS for tax related disputes can choose to submit to a voluntary arbitration process, the results of which will be binding and cannot be appealed. Most often, arbitration applies to cases concerning the negotiations for the payment of back-taxes, disputes about valuations, and issues with claimed deductions and credits. Cases are submitted for approval to the Office of Associate Chief Counsel. If arbitration is approved, the parties involved will agree on a neutral arbitrator and negotiate the terms of the arbitration proceedings. A federal tax court presides over the arbitration proceedings. Once an outcome is reached, it is sent to the tax court for approval. If an involved party, either the IRS or the individual or business, determines the arbitration is going nowhere, they can submit that the case be moved to tax court.
Markedly different than voluntary binding arbitration proceedings, the purpose of an IRS mediation is to reconcile the tax issue at hand, allowing both parties to find a mutually agreeable outcome. During an arbitration, the arbitrator delivers a binding ruling. For IRS mediation proceedings, a neutral mediator works to reconcile disputes between both parties, and the outcome is generated by compromise and discussion on the part of all parties involved. Mediation is a means to resolve tax disputes outside of court, however it cannot be used to delay a trial proceeding.
Benefits of Hiring a Certified Tax Practitioner
When dealing with the IRS it can be risky to go it alone. It is best to contact a certified tax practitioner as soon as you hear that the IRS is disputing any part of your tax filing. Here are several of the benefits of having a tax professional in your corner when dealing with the IRS.
With over 25 years of professional experience dealing with the IRS on behalf of a number of clients, the seasoned experts at Geddes & Company, P.C. have seen it all before. Our unflappable team will be on your side throughout the entire process, offering clear-headed and confident tax advice when you need it most.
Knowledge of Proceedings
Be sure you don’t miss the chance to pursue tax dispute solutions outside of the courtroom. Geddes & Company, P.C. can advise you on whether mediation or arbitration are right for your case, and the timeline and likely outcomes of IRS proceedings.
Getting you the Best Outcome
The administrative professionals at the IRS already have a head start in understanding what is at issue with your tax related mediation or arbitration. Having a certified tax expert on your side who deftly understands tax policy and proceedings helps level the playing field and ensures you get the best outcome possible for your particular case.
Follow Up and Follow Through
After the dust settles and proceedings are completed, you may be left with an outcome you don’t fully understand or know how to handle. A certified tax practitioner will stick with you after your case is resolved, helping you manage your finances in the wake of a mediation or arbitration settlement. This will allow you to stay on the right side of the IRS in the future, and avoid similar potentially costly situations.
Contact Geddes & Company, P.C.
Are you or your business facing increased scrutiny and potential legal action from the federal government for tax related issues? Don’t go it alone, and don’t wait to contact a tax professional to help. Geddes & Company, P.C. has the experts and know-how to help you get out of hot water and get back on financial track. Contact us by phone or online today for the assistance you need and the experience you can trust.