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Tax

Jul. 18, 2024

The perils of handling your own tax audit or dispute

Taxpayers often come out better if they don't represent themselves, even considering the cost of professional fees. F. Lee Bailey, a lawyer, represented himself in a $4 million dispute with the IRS and won the major issue, but lost most of the other ones, including a hobby-loss case.

Robert W. Wood

Managing Partner, Wood LLP

333 Sacramento St
San Francisco , California 94111-3601

Phone: (415) 834-0113

Fax: (415) 789-4540

Email: wood@WoodLLP.com

Univ of Chicago Law School

Wood is a tax lawyer at Wood LLP, and often advises lawyers and litigants about tax issues.

F. Lee Bailey represented himself in Tax Court in a $4 million dispute with the IRS. He won the major issue in the case but lost most of the other issues, including his claimed loss deductions for his yacht. (The New York Times)

Should you handle your own tax audit or dispute? Usually the answer is no, for a variety of reasons. For one thing, if you are having direct communications with the IRS or the California Franchise Tax Board, the chances of a misstep are much higher. With direct communication, whether oral or written, it can be difficult to take back or correct what you say. Of course, it can be efficient to be the repository of all the information the IRS asks you, so you can respond seamlessly.

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