My 1040 tax returns
were audited, resulting in a deficiency.
I filed a timely rebutted to the Revenue Agent's Report (RAR), and requested that my case go to appeals in NY. I live in NJ, but worked in NY.
In court, the agent produced my letter requesting an appeal, to both my attorney and myself, and proclaimed that I could not appeal in NY because I live in NJ.
I never received a response regarding my request for an appeal. Instead, I received a collection notice and a possible levy, if I did not pay the deficiency.
I then contacted the Taxpayer Advocate (TPA), and sent a copy of my request to appeal the RAR, along with all supporting documentation to refute the agent's findings. I also included amended returns
for 2004 and 2005, and documentation for additional expenses that I was entitled to and did not claim. These additional expenses were given to the agent at the final appointment and were disallowed in the RAR without merit for 2004.
However, the exact identical expenses that were not claimed in 2003 that I received a "no change" for 2003, were allowed when I filed an amended 2003 return. The agent disallowed the identical expenses in 2004 that I filed as a protective claim, and never addressed the same expenses when I filed a protective claim for 2005, approximately one year after filing a protective claim for 2004.
The TPA later informed me in a letter, that my amended returns are disallowed and all issues were addressed during the examination, which is a bold faced lie!
I did plead guilty to a misdemeanor for filing a false tax
return in 2004. I duplicated the exact same losses that I was entitled to claim in 2003 for my capital investment in two corporations with my step uncle.
The reason for duplicating the loss was to get my corporate returns audited for which my step uncle who was the president, underreported gross receipts
and or did not file corporate returns. I was a silent partner and my step uncle claimed that we lost money building houses.
Were my civil rights violated based on a taxpayers rights to appeal? Can the IRS issue a collection notice demanding payment of a deficiency until after all of my appeal rights have been exhausted, and were vever afforded to me?
It is my understanding that the IRS cannot even send a collection notice until after a taxpayer has exercised his rights to an appeal.
The issue of my civil rights is perhaps my most viable option against my former employer, the IRS in a lawsuit, if my rights were violated.
It is probably not cost effective to hire a tax attorney for an audit reconsideration even if I should prevail, and I should for the most part.
P.S. If possible, can you answer if my attorney that represented me failed to protect my interests, when he to;d me in court, prior to the agent producing my letter requestimg an appeal of the RAR, that if I do not agree to the RAR, I am going to jail, and by agreeing to plead guilty to a misdemeanor, I would avoid jail. This, despite filing an earlier request to appeal the RAR. The case apparently was never transferred to appeals in NJ, nor was I ever notified of an appeal date.