Question one
When the items of the audit are unpaired, the ordinary operational course of the IRS will issue a 30-day letter of the IRS findings (Rubin, 2010). This letter will ask the taxpayer to agree with the IRS results. In such a scenario, the taxpayer can either agree or not, and in the IRS will send a notice of deficiency. Therefore, the 30-day letter acts as the ticket of taxpayers to the office of appeal to get more favorable findings as compared to the level of the agent. That is the appeals officers can consider the likelihood of settlements of the success of the IRS especially during the litigation of an issue. In the event of a short time, the IRS will issue a 90-day letter (deficiency notice) because it indicates tax deficiency.
Question two
The IRS only has a 3-year statute of limitation when assessing additional taxes. That is the IRS have to file suit against the taxpayer to make tax collection within three years after the filing of the return. For instance, if a taxpayer files a return for 2012 on May 15, 2013, the IRS should assess any deficiency on or before May 2016.
The extension of the 6-year statute of limitation on the calculation applies to earnings that have neglected considerable amount of gross income. The extended statute will give the IRS more time to identify and assess the deficiency in circumstances where the returns of the taxpayer provide no clue to the existence of the omitted income. An example occurred in the case of Colony Inc. v. Comm., 357 U.S (Brown, 2016).
According to the codes, the IRS can make an assessment on tax or bring a law-suit to make a collection of tax that were not assessed at any time in certain circumstances. For example, according to the ruling of the Supreme Court in Badaracco, filing a non-fraudulent return particularly after making a false return should not start running of the statute of limitation of assessment (Brown, 2016).
Question three
The statute of limitation for refund claim is the entitlement for the reimbursement of any overpayment of tax that was executed by the limit of the refund to be paid through a stamp that filed by taxpayers within a period of three years from the time tax was paid.
References
Brown, A. (2016). Statute of Limitations. Irstaxattorney.com. Retrieved 19 July 2016, from http://www.irstaxattorney.com/statoflim.html
Rubin, C. (2010). RUBIN ON TAX: 30-DAY LETTERS VS. 90-DAY LETTERS IN ESTATE TAX
AUDITS. Rubinontax.floridatax.com. Retrieved 19 July 2016, from http://rubinontax.floridatax.com/2010/07/30-day-letters-vs-90-day-letters-in.html
