That’s what the Tax Court told a landscape architecture firm that received a refund, plus interest, for quarterly employment taxes. The refund was because the IRS miscalculated the firm’s liability as zero after mistakenly applying the employee retention credit. When the IRS discovered its mistake, it assessed the firm back taxes, plus interest. The firm argued that the IRS could only collect the tax through a civil lawsuit, but the Tax Court said no. When the original assessment is “imperfect or incomplete in any material respect,” the IRS has 3 years after the return was filed to make a supplemental assessment. And the IRS then has 10 years to collect the tax by levy. #IdeaoftheDay
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