IRS Tax Notices – Do you have to fight a tax assessment for “$.00”?

March 13, 2017
By S. John Kelly
Posted in Business Services

Some days, computers make all of our lives more difficult. Some days, the IRS is right when it claims that “$.00” does not mean zero dollars.  Some days, you have to fight  nonsensical tax assessments.

In a recent case, the IRS sent a taxpayer, Mr. Dees, a Notice of Deficiency, claiming Mr. Dees had a “Deficiency: $.00” on his 2014 income tax return.   Inside the accompanying paperwork, it was clear that the IRS believed that the unfortunate Mr. Dees owed much more than “$.00.”

When the matter came before the Tax Court, the IRS attorney argued that the Notice was valid, claiming that the “$.00” figure was merely the result of a “clerical error.” In a 10 to 7 opinion, the Tax Court ruled that the IRS Notice was valid.  Dees v. Commissioner, 148 T.C. ___, No. 1 (Feb. 2, 2017).

However, even tax cases can have a happy ending, if the taxpayer seeks timely legal advice.  Because Mr. Dees’ lawyer petitioned the “$.00” assessment, this allowed the IRS attorney time to research the matter and conclude that Mr. Dees actually owed the IRS nothing (zilch).  Had Mr. Dees not consulted a tax advisor, he could have owed a material sum to the IRS.

Strassburger McKenna Gutnick & Gefsky can help you fight any tax assessment, even nonsensical ones. Please contact John Kelly, jkelly@smgglaw.com  or Dave Pollack, dpollack@smgglaw.com  at (412) 281-5423 for help with any assessment.   This post is provided for informational purposes only. Nothing in this post creates an attorney client relationship.