Area Directors have the authority to immediately assess tax due on a properly filed tax return without issuing a Notice of Deficiency.
However, the mere act of the taxpayer filing or the IRS receiving the tax return does not constitute an assessment of tax. The IRS must follow the appropriate assessment procedures before the tax will be considered to be assessed against the taxpayer.
Common Assessment Procedure
For most taxpayer, the assessment process begins when a tax return is filed with the appropriate Service Center reporting the taxpayer’s tax liability. Once received, the return is inspected to ensure it has been signed and properly executed and the required schedules have been attached. A check for mathematical accuracy is also made. Once the return is deemed to be complete and correct on the surface, one or more of the follow will take place:
1. If the return is accepted as filed in which the IRS has determined there are no errors, the tax is summarily assessed.
2. If full payment accompanies the return, the assessment of the amount of tax shown on the tax return is satisfied. If additional taxes are owed, an additional assessment may be made by the IRS.
3. If partial payment accompanies the return, the taxpayer is billed for the difference between the amount assessed and the amount received. Before the IRS can take enforced collection action, it must also send a Notice of Intent to Levy. Both of these notices must be sent to the taxpayer before the IRS can take any enforcement action against the taxpayer.
If a taxpayer files a tax return before the due date, the tax return is deemed filed on the due date. This means an early filed tax return will be shown on the IRS records as having been filed on its due date, and the limitations period for assessing additional tax with respect to that tax return will commence on the due date.
A return that has been received by the wrong Service Center is not considered filed until it is received by the correct Service Center for proper processing.