Tax Controversy Roadmap — Part 3
How to contest an assessment when the normal audit track has closed — and why the right route turns on whether you've paid.
Sometimes the normal route is gone. The 30-day protest window lapsed, or the 90-day petition window did. The tax was assessed on a return the IRS prepared for a non-filer. Or new facts surfaced only after the audit closed. The assessment stands — but it isn't necessarily the last word.
There are still routes to contest it. Which one fits turns on a single question: has the tax been paid?
The alternatives split cleanly. If the liability is unpaid, you can ask the IRS to reconsider it administratively, or offer to compromise it on the merits — both without writing a check first. If you've already paid, that door is closed; the route becomes a refund claim, and ultimately a refund suit. One relief track — innocent spouse — is available either way.
A request (Form 12661) to reopen an exam-based or substitute-for-return assessment on information the IRS hasn't already considered. It requires an unpaid balance and genuinely new material; it is not available if you signed a closing agreement (Form 906), settled by offer in compromise, a court has ruled, or you've already paid. If the IRS sustains the assessment, the matter can move on to Appeals.
Where there is legitimate doubt that the assessed tax is correct, you can offer to compromise it on the merits (Form 656-L; IRC §7122). This is a liability dispute — distinct from the doubt-as-to-collectibility offer used when you simply can't pay (that one lives in Part 6). The IRS often expects an audit reconsideration to be pursued first, and a rejection can be appealed (Form 13711).
Once the tax is paid, the way to contest it is to claim it back — an amended return (Form 1040-X) or Form 843, filed within the §6511 window (generally the later of three years from filing or two years from payment). If the IRS denies the claim, it issues a Letter 105C — and that notice starts a hard two-year clock to file a refund suit in district court or the Court of Federal Claims (§6532). That litigation is the subject of Part 7.
Where a liability arises from a jointly filed return, a spouse may seek relief from joint-and-several liability under IRC §6015 — traditional relief (b), separation of liability (c), or equitable relief (f) — by filing Form 8857. A denial is reviewable in the U.S. Tax Court under §6015(e), and the relief is available whether or not the tax has been paid.
A standing assessment is not always a final one. But the alternatives are narrow, fact-specific, and time-bound — and the first move often forecloses the others. The value here is in choosing the right route, in the right order, before a clock decides for you.
Picking among audit reconsideration, an offer, a refund claim, and innocent-spouse relief is a strategic decision, not a clerical one — and it often has to be made under a statute of limitations. Donovan Legal represents taxpayers across the entire arc, exam through litigation, under one signature.
One firm. One signature. Full-arc defense.