Question

Which of the following would be a disadvantage to filing a protest in an IRS audit?

a. The cost involved in filing the protest.
b. Preserves the option for further litigation.
c. The protest will delay the ultimate resolve of the issue.
d. The protest will provide greater information to the taxpayer.

Answer 1

The cost involved in filing the protest is a disadvantage to filing a protest in an IRS audit. The act of filing a protest can become a financial burden due to the necessity of engaging the services of a tax attorney or consultant. So, the option a is correct.

Step-by-step explanation:

The drawback associated with initiating a protest during an IRS audit lies in the financial implications, primarily stemming from the incurred costs.

The act of filing a protest can become a financial burden due to the necessity of engaging the services of a tax attorney or consultant.

This professional assistance is often sought to navigate the complexities of the protest process effectively.

The expenditure may extend beyond mere representation, encompassing fees related to the meticulous preparation and submission of required documents.

Consequently, the overall cost involved in mounting a protest during an IRS audit is a substantial factor to consider.

This financial dimension adds a layer of complexity to the decision-making process for individuals or entities contemplating the pursuit of a protest in response to IRS audit outcomes.

In essence, option 'a' emerges as the accurate choice, emphasizing the financial commitment inherent in contesting an audit finding.

Answer 2

The disadvantages of filing a protest in an IRS audit include the cost of filing the protest and the delay in resolving the tax issue. Option a.

Step-by-step explanation:

One of the disadvantages of filing a protest in an IRS audit is the cost involved in filing the protest. While filing a protest can preserve the option for further litigation and provide more information to the taxpayer, it can also be expensive. Lawyers and other professionals may need to be hired to assist with the protest, which can result in significant legal fees and other costs.

Additionally, another potential disadvantage is that the protest will delay the ultimate resolve of the issue. The process of reviewing a protest and coming to a decision can be lengthy, during which time uncertainty and the burden of potential tax liabilities may continue for the taxpayer. Option a.