In Shakespeare, an English King blames the loss of an important battle on his lack of a horse: “A horse, a horse, my kingdom for a horse!”[1]
In real life (and especially, it seems, in tax law) it is more like to be the lack of a timely piece of paper that causes the taxpayer to lose.
In the course of administering a trust, it sometimes happens that mistakes are made that require correction. For example, distributions may be made that are not in accordance with the provisions of a trust: payments to the wrong beneficiaries, or in the wrong amounts or for the wrong purposes. A similar situation may arise when a trust instrument requires the trustee not to make any disposition of certain “legacy” assets, and the trustee erroneously sells them anyhow.
In such situations, the way to “undo” the transactions is for the parties to reverse the erroneous transaction by returning the distributions made in error. When the year of distribution is a closed tax year and the act of correction is made in a later year, it is important to make sure that the distribution that is returned is treated as a tax-deductible expense, thus offsetting the taxable receipt of the erroneous distribution in the prior tax year.
Continue Reading A Horse, a Horse, My Kingdom for a Horse! Lack of Proper Documentation Dooms IRS Disputes
When a tax return has been selected for office examination, generally the examination of the return will be conducted at the office of the IRS. Normally a taxpayer will find an office examination has begun when he or she has received a letter or telephone call from the IRS informing him of such examination and that the IRS wants further records and information. Returns selected for office examination present 
Many people end up owing the IRS for many reasons and there are various options to resolve your tax debt. Some of the options include an offer in compromise, installment agreement, or currently non-collectible status.
What is the Statute of Limitations?
An assessment results when the liability of a taxpayer is recorded in the office of the Secretary of the Treasury. The assessment establishes the right of the IRS to collect the tax. No lien or levy can be made without an assessment. Assessments are authorized by the Internal Code.
There is a general misconception about what the IRS can and cannot do. Owing money to the IRS is not like owing any other creditor. The IRS is one of only a few creditors who can seize and sell your home even though state law may prohibit other creditors from doing the same.
Deadlines are important in legal matters, especially when it relates to tax issues. There are estimated tax deadlines, tax return filing deadlines, and a host of deadlines if a return is audited and any adjustments are challenged. Once you get to court in a tax dispute – more deadlines. Anytime a taxpayer misses a deadline they usually lose some portion, if not all, of the rights associated with that deadline. Imagine, however, that a taxpayer attempts to meet the deadline by mailing a document that the IRS claims they never received.
Field examinations involve returns with more complex issues, thereby requiring examination by someone more knowledgeable in the field of accounting and the Internal Revenue laws. Field examinations are conducted by Revenue Agents and are normally performed at the taxpayer’s place of business where the Revenue Agent can examine the taxpayer’s books and records and decide on the taxpayer’s correct taxable income and correct tax liability. The Revenue Agent is supposed to make an appointment with the taxpayer at a time and place that will be convenient for the taxpayer. The arrangement of the time and place can be done by telephone; however, the telephone contact cannot be used to verify items appearing on the income tax return.