|INSTRUCTIONS: 4.11. Use Determination Letters to Fight Unethical IRS Tactics and Evasiveness|
In the process of corresponding with the IRS, it is quite common to encounter the following unscrupulous and unethical tactics:
1. IRS picks the weakest argument in your correspondence and ignores all the rest.
2. IRS refuses to respond to all questions or concerns raised in your Request for Refund.
3. They completely ignore or lose your correspondence.
4. They unstaple the letter accompanying your tax return and conveniently “lose” it so they don’t have to respond to it. You can fight this by:
4.1. Number each page, including the attached letter, with “Page ___ of ____”.
4.2. Putting the phrase “Return in valid without attached letter and ALL ___ (number) numbered enclosures.”
5. Agent responding to your correspondence refuses to give his real or full name or identity, such that he or she can’t be held personally responsible for fraudulent response.
6. IRS lies in their response, because they responded anonymously and therefore can’t be held personally liable for fraud.
7. IRS will try to distract attention away from the questions asked to totally irrelevant subjects so they don’t have to answer.
Many people are victimized by these tactics, but they aren’t insurmountable and you don’t have to be. IRS regulations are in place requiring agents to determine liability in your specific circumstances, respond to your questions directly and completely, and be held personally accountable in their response. The Treasury Regulations found in 26 CFR Subchapter H entitled “Internal Revenue Practice”, Part 601 entitled “Statement of Procedural Rules”, Regulation 601.201 (26 CFR 601.201) identifies specifically how you can compel an authenticated and official response out of the IRS to your specific tax questions and your personal tax liability. It will cost you money, but at least you have a guaranteed way to get your questions answered relating to your tax liability. You can use the link below to examine these regulations:
Lets take a closer look. First, we find in 26 CFR 601.201(a)(1) the following:
Sec. 601.201 Rulings and determinations letters.
(a) General practice and definitions.
If you read through this regulation, you find that there are five types of responses the IRS can prepare:
The one you want is the determination letter. The determination letter is for income and gift tax matters, as indicated in 26 CFR 601.201(c ). We have a sample determination letter request on our website at:
The fee the IRS charges for a Determination Letter is $275. You don’t need to follow the sample format we provide above and can instead, for instance, embed the entire determination letter request into your Request for Refund that we provide, which is a very prudent tactic. If you file the determination letter request with your Request for Refund or tax return, there are some important things to keep in mind:
(4) Notwithstanding the provisions of subparagraphs (1), (2), and (3), of this paragraph, a district director will not issue a determination letter in response to an inquiry which presents a question specifically covered by statute, regulations, rulings, etc., published in the Internal Revenue Bulletin, where (i) it appears that the taxpayer has directed a similar inquiry to the National Office, (ii) the identical issue involving the same taxpayer is pending in a case before the Appellate Division, (iii) the determination letter is requested by an industry, trade association, or similar group, or (iv) the request involves an industrywide problem. Under no circumstances will a district director issue a determination letter unless it is clearly indicated that the inquiry is with regard to a taxpayer or taxpayers who have filed or are required to file returns over which his office has or will have audit jurisdiction. Notwithstanding the provisions of subparagraph (3) of this paragraph, a district director will not issue a determination letter on an employment tax question when the specific question involved has been or is being considered by the Central Office of the Social Security Administration. Nor will district directors issue determination letters on excise tax questions if a request is for a determination of a constructive sales price under section 4216(b) or 4218(e) of the Code. However, the National Office will issue rulings in this area. See paragraph (d)(2) of this section.
Therefore, we need to request the determination letter BEFORE we file our return, and state in our return that includes the determination that the return is submitted FIRST as a determination letter, and after that, the materials provided are to be used as a tax return. Otherwise, the District Director we send it to won’t rule. Also, we should send the determination letter request to other than the District Office that would service our claim, because according to the above:
Under no circumstances will a district director issue a determination letter unless it is clearly indicated that the inquiry is with regard to a taxpayer or taxpayers who have filed or are required to file returns over which his office has or will have audit jurisdiction.
Alternatively, one can also send the request for determination letter to the National Office letting them know your problem and asking them to send the request to whatever District Office can service it.
Determination letters must follow a strict format and be very clear and concise so that the IRS has no wiggle room to misinterpret or misunderstand your questions. Thr format of the request for determination letter, the cost, and the procedure required is described in Internal Revenue Bulletins, which you can read using the Tax Research CD-ROM we described earlier in section 188.8.131.52. You should follow the same format in your request for determination letter that lawyers would use when preparing a deposition, a request for admissions, and/or an interrogatory. Each question must have specific answers they can select or facts they can provide, and a default answer must be provided to each question so that if they don’t answer the specific question, then there is still an answer they provide. Provide the questions on a separate attachment and require a full printed name and signature on the IRS response, as well as a witness and/or notary. Send everything via certified mail with return receipt. A recommended set of questions to include with your determination letter is contained in the Test for Tax Professionals found in section 9.2 and available in editable format on our website at:
We have IRS instructions and sample determination letter format found in the Sovereignty Forms and Instructions Online of our website at:
After you open the above page, select “Forms” in the upper left corner and then scroll down on the left to items 13.6 through 13.8.
We wrote the IRS to ask them about determination letters. Below was the dialog along with their answer:
For the purposes of requesting determination letters as described in 26 CFR 601.201 for an individual taxpayer, is there a fee required, and if so, how much? May an individual taxpayer request a determination letter from the district office for the purposes of determining only the extent of his Subtitle A Income tax liability? Chris
Thank you for contacting us. Publication 1375 provides procedures for issuing rulings, determination letters, and information letters and for entering into closing agreements on specific issues under the jurisdiction of the Associate Chief Counsel (Technical). The material is a reprint from the first weekly issue of the Internal Revenue Bulletin. The appendix contains a schedule of user fees. You may use this schedule to determine which fee is applicable to your request. Private letter rulings and advance letter rulings usually cost $200.00 and up.
Letter ruling requests cannot be submitted to the district office. Letter ruling request should be notated Ruling Request Submission and sent to:
Internal Revenue Service Associate Chief Counsel (Technical),
Attn: CC: DOM: CORP: T
PO Box 7604
Ben Franklin Station
Washington, DC 20044
You may download publication 1375 from our web site at www.irs.gov or you may order by phone at 1-800-829-3676
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