Reply to IRS penalty- Settle or proceed to litigation?

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[quote=Anonymous][quote=Anonymous][quote=Anonymous]OP, I was in a [b]very[/b] similar situation several years ago and decided to litigate. The IRS frequently lacks sufficient grounds and evidence for pursuing these sorts of cases. Moreover, there are countless precedent cases of this type that have been argued in favor of the defendants. Mine was dismissed and I was further awarded all legal fees and punitive damages to the tune of $5M. Absolutely you should push back on this! Will recommend my attorney, if you’re interested. [/quote]

OP here.

Are you able to just post a website link here? (not really sure how I can get that info from you).

I just saw this on the IRS website:

[i]However, at its discretion, [b]Appeals may reconsider its prior decision if evidence becomes available that indicates further consideration is warranted.[/b]
Taxpayers may also pay the penalty previously upheld by Appeals and file a claim for refund. The claim for refund may be transferred to Appeals, if denied at the campus level.[/i]

I don't think my Tax Attorney provided the timeline showing my diligence to the Independent Office of Appeals.  I remember the Tax Attorney saying that the timeline would be helpful for them "in case we have to go to the next stage."  During the Appeals discussion, the Officer wanted to know the exact moment I realized I missed the deadline. I had that in my timeline but I am not sure if my documentation was provided.

I really appreciate the discussion here, you all. This thread is really motivating me to do more research. The more I dig in, the more I see that my case can be handled so much better- but it's one of those "how do you know when your doctor is good" kind of thing.

My Tax Attorney filed a form 843, and said that my CPA should have filed this first rather than writing a letter. 
But now that I researched the form 843, it doesn't even look right to me.

I'm trying to read this article and thinking about clicking on the "let's chat" to get a 2nd opinion.. but it's late and I have to get to bed!

https://sftaxcounsel.com/bringing-the-3520-penalty-fight-to-the-irs-contesting-a-3520-penalty-in-tax-court/

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I read most of the sftaxcounsel.com blog referenced above. As I suspected, either your CPA or your tax attorney reacted too quickly in sending a protest letter to the IRS which killed your right to challenge the assessed penalty in Tax Court. If my reading is correct, then your choice is to pay the $40,000 and challenge in Court of Claims or in Federal District Court or to pay the reduced amount of $20,000.

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