Hale E. Sheppard article on Case Shows Tricky Issues with Making “Deposits” with the IRS to Stop Interest Accrual during Lengthy Tax Disputes
Tax disputes with the IRS can last a very long time, even under normal circumstances. The duration of these battles has increased recently because of delays triggered by the Coronavirus. These holdups cause taxpayers ongoing anxiety and uncertainty. They also hurt taxpayers financially, as interest charged by the IRS on the ultimate liability continues to accumulate while the fighting ensues. Taxpayers who are aware of this economic reality often seek potential solutions, among them making a “deposit” with the IRS to halt interest. The rules associated with doing so are complex, of course, and they prevent some taxpayers from achieving their goals. This article analyzes key issues related to making “deposits” with the IRS, using a recent Tax Court case, Ahmed v. Commissioner, as a point of reference.