Have you filed for tax refunds but instead received a Tax Topic 151 from the Inland Revenue Services, with reduced refunds or without a refund at all? This kind of letter can be disappointing, especially for those who have kept their taxes in order. Anytime you receive this kind of letter, you should get in touch with your tax audit attorneys who will help figure out the tax situation or the misunderstanding which needs to be ironed out.
Tax Topic 151 defined
This refers to a situation where an individual’s tax refund is either reduced or withheld to cover payments that the applicant is purported to owe the government. The amount which is owed includes but is not limited to federal student loans that have been defaulted, unpaid child support, and back taxes that you have failed to pay.
If the IRS takes your refund to pay any of these debts, a letter will be sent to you explaining that decision. Although it isn’t a must that you respond to the topic 151 letters that the IRS will send you, they may pursue other collection efforts if they believe that you still owe some debts.
However, you can dispute under tax code 151 if you believe that there was an error, either on your own or through an attorney. For better results, it’s advisable to get the help of tax audit attorneys.
The time in which you are allowed to respond to tax topic 151 letters varies, and this is mostly dictated by the action which you will need to take. You can choose to appeal the decision directly with the Inland Revenue Services or take it to the Tax court. No matter the approach that you choose, you should procure the services of an experienced tax audit attorney. You have to respond within 30 days of receiving the tax letter, but if you decide to file an appeal at the tax courts, you will have up to 90 days to respond to the letter.
Your appeal rights regarding tax topic 151 letter
Two options are available to you. The first option is to write directly to the IRS, disputing the contents of the letter. You can also appeal to a tax court that operates within your jurisdiction. Your written protest to the Inland Revenue Services should include the following:
- Valid contact information
- Statement of intention to appeal the decision
- Copy of the tax letter which you received.
- Explanation of what you think is erroneous, together with evidence.
- A list that details the years that your tax payments are in question.
- Reference to any law or any provision that you may be relying on in your arguments.
Receiving tax topic 151 letters should worry you. If not handled well, your tax matters can mess your finances and you have to get the help of a tax attorney. There are various valid reasons why the IRS may send you this type of letter and you have to treat it seriously. Fortunately, some skilled attorneys and accountants can help you handle this matter to completion.