You as theinvestors may be paying too much tax due to fear of the IRS. You can eliminate this fear by knowing that you have rights against the IRS. An IRS employee may lose his joy through any of ten offenses, including violation of your constitutional rights as a US citizen and taxpayer.
You can sue the IRS for up to $100,000 of damages caused by an IRS employee who negligently disregards the tax law and up to a $1,000,000 if an IRS employee willfully violates the tax law.
Only one out of 16 audited tax payers goes to Appeals. This may be caused by the taxpayers fear of the IRS and the processes, or a lack of knowledge on the part of the taxpayer. The Appeals process is a hidden weakness of the IRS system. You stand a much better chance of receiving positive results in appeals, with a 40% average reduction in taxes.
You do not need an attorney to represent you before Appeals, although you should use a competent tax specialist who could be a CPA or a tax attorney. This is because the Appeals (or Appellate) level is not a court. The function of the appeals officer is to settle the appeal and avoid unnecessary and hazardous litigation. A loss by the IRS in court is both time consuming and expensive.
OK if youre going to play hardball, I got hard bats. I dont even want to waste my time to talk to your manager. Stop now as I will settle this in Appeals. This must be you attitude if you elect to try appeals rather than accepting the auditors decision. The auditor does not want to go to appeals as it is a negative mark on his evaluations and the knowledge that your chances of reversing his decision significantly increased. This show the IRS that you cannot be intimidated because of your knowledge of the system.
Knowing your right and the process method of the system demonstrates to the IRS that you cannot be intimidated into accepting the auditors decision. By going to appeals, or the threat of going to appeals over gray areas, you demonstrate that you know you have a good chance of winning by going to Appeals, and the auditor may back down.
Plus, even better, there are audit-proofing techniques (discussed in other articles) that you can employ so you do not get audited in the first place. But if you are audited, you have an ace in the hole – Appeals.