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Tax Controversy Roadmap — Part 3

Exam Alternatives

How to contest an assessment when the normal audit track has closed — and why the right route turns on whether you've paid.

Donovan Legal · Tax Controversy Practice

This post is part of a high-level series. It explains federal tax procedure in general terms and is not legal advice; reading it does not create an attorney–client relationship. Eligibility for each route, and the deadlines that govern it, turn on the specific facts of a matter — and the first move can foreclose the others. Before choosing a route, consult counsel.
font-family="'Helvetica Neue',Arial,sans-serif"> TAX CONTROVERSY ROADMAP · PART 3 Exam Alternatives How to contest an assessment when the normal audit track has closed. DETAIL MAP Four routes to contest an assessment — the choice turns on whether the tax has been paid. 2 yr §6532 deny (Letter 105C) → sue · Part 7 Disagree With Assessment after audit / SFR · new facts · Parts 1–2 Audit Reconsideration Tax unpaid · new information Form 12661 → APPEALS · 4 OIC — Doubt as to Liability Settle a disputed liability Form 656-L · §7122 → APPEALS · 4 Claim for Refund Pay first, then claim it back Form 1040-X / 843 · §6511 → LITIGATION · 7 Innocent Spouse Relief from joint liability Form 8857 · §6015 (b)/(c)/(f) → TAX COURT · 7 TAX NOT PAID TAX PAID AVAILABLE EITHER WAY PART 3 OF THE SERIES. General information about tax procedure — not legal advice. Eligibility and deadlines turn on the specific facts. DONOVAN LEGAL One firm. One signature. Full-arc defense.
Part 3: four routes to contest an assessment, grouped by whether the tax has been paid.

When the front door has closed

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 organizing question — paid or not?

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.

Tax not paid: contest without paying first

  • Audit reconsideration→ APPEALS · 4

    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.

  • Offer in compromise — doubt as to liability→ APPEALS · 4

    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).

Tax paid: claim it back

  • Claim for refund→ LITIGATION · 7

    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.

Two clocks govern the refund route. First, the claim itself must be filed inside the §6511 period. Second, once a claim is denied, §6532 gives two years from the date of the disallowance notice to sue — and pursuing an Appeals reconsideration of the denial does not stop that clock from running.

Available either way: innocent spouse

  • Innocent-spouse relief→ TAX COURT · 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.

These routes are not interchangeable. Sequence and eligibility decide which one is even available — paying the balance closes audit reconsideration; a closing agreement or a prior court decision closes it too; and a doubt-as-to-liability offer and a doubt-as-to-collectibility offer answer entirely different questions. Choosing the wrong door can waste the one that was actually open.

Why this station matters

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.

One firm, the full arc

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.