What should I do if the IRS examined and changed my federal income tax return?

Q: What should I do if the IRS examined and changed my federal income tax return?

A: IRS examination may or may not result in more tax. An examination may be closed without change or you may even receive a refund. If the IRS proposes to increase your tax, however, you have the right to appeal this decision both within the IRS and to the courts. The IRS examines tax returns to verify the correctness of income, exemptions, credits, or deductions reported on the returns. An IRS computer program selects most returns that are examined. If you agree with the results of the audit, you may sign the consent form provided by the IRS. You may pay the tax at this time, or wait until the IRS sends a bill. Interest is charged on the additional tax from the due date of the return. However, the IRS must send a bill within 30 days from the date the consent agreement is signed. If you do not agree with the examiner's report, your first option is to meet (personally or through your representative) with the examiner's supervisor to discuss the report further. If you reach an agreement with the supervisor, the case is closed. If no agreement is reached, the IRS issues a written preliminary notice of proposed adjustments 30-day letter. If you still do not agree with the 30-day letter, you have the right to appeal the findings within the IRS or to go to court. If you are eventually found to be liable for tax, you will be liable for interest on the tax deficiency and possibly penalties.

As long as your federal income tax return is examined and changed by the IRSand you owe additional tax, you must report these changes to the Dept of Rev of yur state, within 6 months of the final federal determination.

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Alimony

AskTaxGuru.com Junior Member, lhall700, asked:

My question is about Alimony, I am court ordered to pay my ex-wife $925.00 a month in Alimony. It is split up like this; I send her a check for $500.00 and sent a check of $425.00 to the federal bankruptcy courts. Even though we were both responsible for the bankruptcy the judge order me to pay the bankruptcy as part of my alimony. So do I file my alimony as $925.00 per month on my federal return or do I just claim the $500.00 a month that she receives.

No one here seems to be able to answer my question so I am going to post what two different tax agencys told me.

Dear TaxACT(R) Customer:
If your divorce decree recognizes the bankruptcy payment as alimony, then you should include the whole amount paid for alimony on your tax return.

Taxaid answer:
If your divorce decree, and the court, designates that you pay alimony to your ex of $925, then that is what you can deduct. Apparently because of the bankruptcy proceedings the court ordered that you pay $425 of your wife's alimony directly to the court to assure payments on HER share of the bankruptcy.

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