Can You Sue the IRS? Yes But Only in Certain Situations. You can bring a lawsuit against the Internal Revenue Service (IRS), but only in certain situations. For instance, you can sue the agency if it has erroneously seized your property, but you cannot sue the IRS because you think taxes on unconstitutional.
You are entitled to a fair and impartial administrative appeal of most IRS decisions, including many penalties, and have the right to receive a written response regarding the IRS Independent Office of Appeals' (hereinafter, Appeals) decision. You also generally have the right to take your case to court.
You can file a amended return and claim your money back. It may or may not trigger an audit, and be scrutinized but it will likely be by different agents, so if it was truly an error on their part, you should get to keep the money.
“Surprisingly, taxpayers win some or all of their cases against the IRS about 14% of the time.”
You can file a suit in a United States District Court or the United States Court of Federal Claims. However, you generally have only two years to file a refund suit from the date the IRS mails you a notice that denies your claim.
Takeaway 1: You can sue the IRS but only under very specific circumstances, such as if you believe they have made an error in calculating your taxes. Takeaway 2: You cannot sue the IRS for tax disputes without first exhausting all available administrative remedies within the agency itself.
Am I Responsible If My Tax Preparer Makes a Mistake? Yes. If you signed on the bottom line, you are responsible for a mistake on your tax returns and you are on the hook for any penalties the IRS charges. That said, the professional who prepared your return may offer to reimburse you for any losses due to errors.
Use Form 1040-X, Amended U.S. Individual Income Tax Return, and follow the instructions. You should amend your return if you reported certain items incorrectly on the original return, such as filing status, dependents, total income, deductions or credits.
The Taxpayer Advocate Service (TAS) is an independent organization within the IRS and is your voice at the IRS. We help taxpayers whose problems are causing financial difficulty. This includes businesses as well as individuals.
Due to sovereign immunity, the IRS can't be sued for pain, suffering, or emotional distress. Sovereign immunity, by definition, refers to the fact that the government cannot be sued without its consent.
Requesting an appeal
If taxpayers are eligible to submit an appeal, they can write a letter to request an appeal and mail it to the IRS address on the letter they received with their appeal rights.
A case in the Tax Court is commenced by the filing of a petition. The petition must be timely filed within the allowable time. The Court cannot extend the time for filing which is set by statute. A $60 filing fee must be paid when the petition is filed.
Your tax litigation attorney may be able to negotiate a settlement with IRS Appeals, but you retain the option to go to Tax Court if an agreement can't be reached. There are simplified procedures for filing a protest requesting an appeals conference if the tax for any period is less than $25,000.
Taxpayers have the right to raise objections and provide additional documentation in response to formal IRS actions or proposed actions, to expect that the IRS will consider their timely objections and documentation promptly and fairly, and to receive a response if the IRS does not agree with their position.
This is a steep penalty, and the IRS usually charges it (or, “assesses” it) when taxpayers overstate their deductions or don't report all their income. Negligence is defined under the law as any failure to make a reasonable attempt to comply with the tax laws.
Failure to File Correct Information Return
Failing to file information returns or failure to include all required information. $130 for failure to file correct information returns, with respect to which such a failure occurs.
The Bottom Line
Even though the IRS does not check all tax refunds, it is a large agency with a wide reach that has a variety of means of catching tax cheats and liars. The penalties for avoiding or lying about taxes are severe.
Taxpayer Advocate Service (TAS) - This free service helps you resolve tax problems. Get help with delayed or undelivered refunds, assistance if you are unable to pay your taxes, and more. Find a local taxpayer advocate in your area. Low-Income Taxpayer Clinics (LITCs) - LITCs represent people in disputes with the IRS.
A: Yes, provided they have committed negligence, or a malpractice. California's comparative negligence jurisdiction, in a lawsuit, the client is usually in the best position to catch an error, and therefore a 100% recovery is rare.
Report fraud, waste and abuse to Treasury Inspector General for Tax Administration (TIGTA), if you want to report, confidentially, misconduct, waste, fraud, or abuse by an IRS employee or a Tax Professional, you can call 800-366-4484 (800-877-8339 for TTY/TDD users). You can remain anonymous.
We may be able to remove or reduce some penalties if you acted in good faith and can show reasonable cause for why you weren't able to meet your tax obligations. By law we cannot remove or reduce interest unless the penalty is removed or reduced.
When a taxpayer can't pay their full tax liability or if paying would cause financial hardship, they may want to consider applying for an Offer in Compromise. This agreement between a taxpayer and the IRS settles a tax debt for less than the full amount owed.
What should I do? Request an expedited refund by calling the IRS at 800-829-1040 (TTY/TDD 800-829-4059). Request a manual refund expedited to you.
Even though the IRS has many weapons at its disposal, you have many rights, including the right to consult a lawyer to help you obtain tax relief.