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Responding to Common IRS Notices: 90-Day Letters, First-Time Penalty Abatement, and Reasonable Cause Relief

Note: CLE credit is not offered on this program

Recording of a 110-minute CPE webinar with Q&A

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Conducted on Wednesday, January 17, 2024

Recorded event now available

or call 1-800-926-7926

This course will explain the many types of notices issued by the IRS, including how to respond to each appropriately, how to properly request abatement of penalties charged, and current IRS responses to abatement requests.

Description

Every IRS notice received contains potential penalties and a required response date. Responding appropriately and effectively can provide relief from penalties and often undeserved additional tax liability for clients. One of the most common notices issued by the IRS Automated Underreporter Program (AUR) is the Notice CP 2000. This notice is sent to propose a tax assessment for underreported income. This is often the result of a mismatch of information, the difference between what was reported to the IRS and what was included on a taxpayer's return.

More alarming is Notice CP 3219A, a Statutory Notice of Deficiency, better known as a 90-day letter or a ticket to tax court. This notice is sent as a follow-up to the CP 2000. Responding timely and adequately is critical. Or, better yet, take steps to avoid this notice altogether.

In addition to a proposed tax assessment arising in underreported income cases, IRS will propose an assessment of the Substantial Understatement penalty in cases involving significant tax underreporting. In these penalty cases, there may be reasonable cause, reliance on a professional, or facts and circumstances that allow penalty relief. Knowing how to respond to AUR notices correctly and the proper steps to take for penalty abatement is critical for practicing tax professionals.

Additionally, IRS assesses failure-to-file (delinquency) and failure-to-pay penalties in cases in which tax returns are filed late or tax payments are made late. Understanding these notices, including both the first-time penalty abatement procedures and reasonable cause defenses, greatly enhances the prospect of a successful resolution for tax professionals representing taxpayers in these disputes.

Listen as our panel of seasoned experts explains the different types of IRS notices, the appropriate responses to each, and how to mitigate penalties charged to taxpayers.

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Outline

  1. IRS notices: an overview
  2. Types of notices
    1. CP 2000
    2. CP 3219A
    3. Other notices
  3. Requesting penalty abatement
  4. IRS responses to abatement requests

Benefits

The panel will review these and other critical issues:

  • How to appropriately respond to common IRS notices
  • What are reasonable cause exceptions to specific penalties
  • How to respond to a 90-day letter
  • How to request first-time penalty abatement
  • IRS responses to penalty abatement requests

Faculty

Pickett, James
James Pickett, CPA
Director
Bennett Thrasher

Mr. Pickett is a Director in Bennett Thrasher’s Tax Controversy practice, where he is responsible for helping...  |  Read More

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