After paying your taxes, you’re probably like many other people eagerly awaiting your refund. Perhaps you often leave the house to check your mailbox or check the IRS website daily to see the status of your tax refund. Then one day, instead of a tax refund, you receive a notice that you must take action under Section 151 of the tax code. This is also known as IRS Section 151. Read this article if you want to know what this means and what you can do about it. Tax Topic 151 means that your return may be smaller than expected because you received a tax adjustment or deduction. You will receive an official letter/report from the IRS explaining the actual premises and adjustments to your refund, as well as details on how to dispute this action, which may delay your refund.
- This is not good news, but the good news here is that the IRS has processed you. You have time to appeal the adjusted amount, and if you win, you will get your refund.
Tax Topic 151 – The Right to File a Lawsuit
- The IRS has an administrative appeals system that works with taxpayers to resolve tax disputes to avoid litigation. The role of the Appeals Department is to independently review tax disputes and consider the positions of both the taxpayer and the IRS. The goal of the Appeals Department is to resolve tax disputes fairly and maintain the impartiality of both parties.
- The IRS will send a report and letter explaining the proposed adjustment or the submitted or accepted collection action. The letter will also describe your right to request a meeting with the appeals or settlement official and how to request a meeting. In addition to review and adjustment, you may appeal penalties, interest, trust penalties, offers to settle, liens, collections, and many other things. If you decide to request an appeal conference, be prepared to support your position with records and documentation.
How to Deal with IRS Code 151
- The first Code 151 letter informs you that your tax refund is pending. After this initial letter, you will have to wait about four weeks or more. This letter will contain instructions from the IRS regarding additional documents and information you will need to complete the tax return process. The letter should also tell you whether you plan to continue or stop your Tax Topic 151 classification.
- Suppose your Tax Topic 151 classification is continued. In that case, the letter must tell you the reasons for the category. The actions the IRS intends to take or has taken, and the options available to you.
Information that the letter must contain
The letter should also contain the following information
- Information about your right to appeal
- An explanation of how to appeal
- A description of how to make an appointment with an appeals officer or settlement officer.
- If you already have a debt that has caused you to be classified as a taxpayer. You should take steps to settle that debt as soon as possible. In this case, it is best to seek professional help. For example, if you have unpaid income taxes, you should contact Community Tax to discuss tax debt relief.
- However, if you disagree with the classification of your tax problem 151, the easiest and most economical way is to contact the IRS directly. The IRS encourages taxpayers to resolve their disputes through informal administrative procedures to avoid costly litigation.
- In this case, contact the Independent Appeals Office (an organization not affiliated with the IRS whose mission is to mediate and resolve tax disputes). The purpose of this office is to consider the views of both the taxpayer and the IRS. And, after a thorough review, reach a fair and impartial decision on the matter. If you are not satisfied with the conclusion of the State Tax Agency, this is the only point of contact where you can file an administrative appeal.
The above-explained all the information about Ultimate Guide for What Does It Mean by Tax Topic 151 and How to Appeal? It means that you’re getting a tax adjustment or offset (e.g. due to an incentive payment adjustment). it may end in your refund being less than you estimated.
Villie Walters Ramirez is a 32-year-old sales assistant at a tax king who enjoys accounting, tax preparation NYC, and bookkeeping. She has a post-graduate degree in accounting, and she has a severe phobia of cats. She enjoys traveling A lot.