What is the Definition of an Assessment?

It has been asked in the queries how to define an assessment. To put it plainly, an assessment is the formal recording of a taxpayer's tax liability. However, this simple definition fails to alert you to the vast division between not owing and owing the IRS, which will bring a myriad of procedural rules to follow.

Once the IRS places your debt into their system it is an "assessment" and they can collect. Prior to that, they cannot collect. You can "self-assess" this debt by filing a return. If you fail to file a return, the IRS can gather all the evidence they can about you and file the return for you.

So, prior to an assessment are the procedures towards assessment: Filing returns, Return Errors, Audits, Unfiled Returns, Appeals, & Tax Court each of which carries its own strategies and tactics.

After assessment are the procedures of Collection, Appeals, Offer in Compromise, Bankruptcy, US District Court, Penalty Abatement, among other things.

Each of these assessments and procedures are also found in the area of Business Tax, with the huge added wrinkle of the Trust Fund Recovery Penalty.

Then, all of this is repeated with the Colorado Department of Revenue.

Click on the links above for advice on each of these topics!

J. David Hopkins, JD, LLM