Mel Recently Received a 30-Day Letter from the IRS

question 76

Essay

Mel recently received a 30-day letter from the IRS. Although his tax return being audited has several potential large issues (potential tax consequences of $70,000 - $80,000), the IRS agent auditing his return only identified one item that will require a more modest adjustment ($10,000). Mel feels strongly that the $10,000 adjustment would not hold in court and was surprised that the IRS agent did not identify some of the other potential larger issues. What are Mel's choices with the 30 day letter and what factors should influence his decisions?

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Definitions:

Civil Law

The body of laws that govern the rights and responsibilities either between persons or between persons and their government.

Remainderman

The recipient of the trust corpus, the property held in trust, when the trust is terminated.

Distributed

Spreading out resources or processes across multiple locations or over a network, often relating to computing or organizational strategies.

Health Care Proxy

A document that empowers an agent to make medical decisions for a principal who is unable to make those decisions for himself or herself.