IRS SIMPLIFIES ONLINE ISSUANCE OF EIN'S

U.S. taxpayers who require an employer identification number (EIN) generally obtain one by filling out a Form SS-4 and submitting it to the IRS via mail, phone, fax, or over the internet. The IRS has now further simplified the process by allowing one to be issued immediately over the internet without using a Form SS-4. Instead, the online service prompts the taxpayer with questions, with succeeding questions varying based on the prior responses. The system also provides help screens so that the taxpayer does not have to go look at the Form SS-4 instructions to complete the answers.

At the end of the process, an EIN is issued to the taxpayer and a confirmation notice is provided which the taxpayer can view, print and/or save, so that the taxpayer does not have to wait to receive one in the mail.

An authorized person can go through the process on behalf of the taxpayer. However, in that case, no confirmation notice is immediately provided, and it is instead mailed to the taxpayer. At first review, the process does not appear to provide for issuance of an EIN to a foreign entity.

An EIN issued in any manner by the IRS (phone, fax, mail, or online) takes up to two weeks before it becomes part of the IRS' permanent records. While you can use an issued EIN immediately, you must wait until it is part of the IRS' permanent records before you can file an electronic return, make an electronic payment, or pass an IRS Taxpayer Identification Number matching program.

The online application can be accessed at https://sa1.www4.irs.gov/modiein/individual/index.jsp or by following the links starting at  http://www.irs.gov.

IR 2007-161

12 DAYS NOTICE NOT ENOUGH

Before the IRS can adjust or assess income taxes for a tax year, it must send a statutory notice of deficiency (also known as a "90 day letter") to the taxpayer, advising the taxpayer of its intent to assess taxes. This notice requires the IRS to wait 90 days before it can assess the taxes, during which period the taxpayer can petition the Tax Court to challenge the proposed assessment. If the taxpayer does not file a timely Tax Court petition, the only way to obtain judicial review of the tax assessment is to pay the taxes and sue for a refund in federal court. Thus, a taxpayer cannot generally obtain judicial review (without paying the tax) unless the taxpayer files a Tax Court petition within the 90 day period.

Under Code Section 6330, a taxpayer can obtain a judicial "due process" hearing in regard to the IRS seeking to levy on his or her assets. Generally, this hearing cannot be used to review the proper assessment of the tax that the IRS is trying to collect - that is, it cannot be used as a backdoor method of getting such a review outside of the above 90 day review procedures. However, Section 6330 does provide that the tax can be reviewed if the taxpayer "did not receive any statutory notice of deficiency for such tax liability or did not otherwise have an opportunity to dispute such tax liability."

In a recent Tax Court case involving Section 6330, the taxpayer did not receive his 90 day letter until 12 days before the expiration of the 90 day period due to the taxpayer moving from his last address known to the IRS. The legal issue was whether having only 12 days to file a petition with the Tax Court (which the taxpayer did not do) denied him the "opportunity to dispute" the underlying tax liability. The Tax Court ruled that 12 days was not enough to give him such an opportunity, and thus allowed review of the tax liability in the Section 6330 due process hearing.

Kuykendall, 129 T.C. No. 9 (2007)

PROPERTY TAX VOTE DERAILED, AT LEAST FOR NOW [FLORIDA]

Florida's scheduled vote on January 29 on a constitutional amendment to revamp its homestead property exemption tax system has been cancelled by a Tallahassee judge. The judge indicated that the amendment is confusing and misleading to voters.

One problem with the amendment is that the ballot summary doesn't tell voters that the new system will phase out the popular Save Our Homes tax cap limiting taxable homestead value increases at 3 percent a year. It is also misleading in promising "everyone" a minimum $50,000 homestead tax exemption.

This does not mean that the vote is off for good. The Florida Legislature may appeal the ruling, or simply correct the defects in its October 3 special session.