Have a Tax Question? Ask a Tax Expert
Possibly. If the deduction you claimed is denied by the IRS, and that denial increases your gross income to the next income bracket, and you have no other deductions that offset the increase, the IRS will determine your total tax liability based on the gross income in that higher bracket.
I would discuss with the agent the deduction, and if he or she is intent on denying it, I would suggest you make what is known as "an offer in compromise." Meaning, you offer to pay an amount you determine to offset the disallowed deduction, vice allowing the IRS to redetermine your income based on the higher bracket.
Agents look to close cases quickly, unless violations are egregious, or your offer in compromise is unjust (for example, you owe $100k, and offer to settle for $5k).
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