If you`re a taxpayer who has made an error on your tax return, the IRS offers a program called the 906 closing agreement to resolve issues with the agency.
The 906 closing agreement is a legal document that allows taxpayers and the IRS to reach an agreement on disputed tax matters. It`s often used in situations where the taxpayer has made a mistake on their tax return, such as underreporting income or claiming deductions they`re not entitled to.
When a taxpayer enters into a 906 closing agreement with the IRS, they agree to pay the additional taxes owed and any related penalties and interest. In exchange, the IRS agrees not to pursue criminal charges or civil penalties against the taxpayer for the issue covered in the agreement.
The 906 closing agreement is not an option for all taxpayers. It`s generally only available for those who have made relatively minor errors on their tax returns, and who are willing to cooperate with the IRS to resolve the issue.
To be eligible for a 906 closing agreement, the taxpayer must have a valid reason for the error on their tax return. For example, they may have made a mistake due to a misunderstanding of the tax laws or due to a software error.
Additionally, taxpayers who have intentionally underreported their income or committed fraud are not eligible for a 906 closing agreement. These types of cases may be referred to the IRS`s Criminal Investigation Division for potential prosecution.
If you`re considering a 906 closing agreement, it`s important to work with a qualified tax professional who can help you navigate the process. A tax attorney or enrolled agent can help you determine if you`re eligible for the program and assist you in negotiating with the IRS.
Overall, the 906 closing agreement can be a valuable tool for taxpayers who have made errors on their tax returns. By working with the IRS to resolve the issue, taxpayers can avoid potentially serious consequences and move forward with peace of mind.