Tax disputes may arise at any time in defending tax position to tax authorities. Tax disputes is usually attributable to controversies and grey area in the application of tax regulation, but in some cases the lack of defending tax position strategy becomes the main trigger. The other major cause may come from the lack understanding of tax regulations.
Controversies with the tax authorities may arise at various stages. In a tax audit, this may concern with particular corrections put forward by the tax authorities to which you do not agree. If not settled during the audit, another controversy may arise over the tax assessment resulting from the audit. An objection letter will need to be filed with tax authorities as a way to solve the controversy.
Lengthy discussions with the tax authorities will follow after the filing of an objection letter. While deliberation is underway, another controversy may arise over the measures undertaken by the tax authorities to collect the tax assessment.
Further, when the tax authorities ultimately releases a decision on the objection, another controversy may still arise, especially if the tax authorities concludes that there is no merit in your objection. Litigation would be the appropriate way to deal with the last controversy.
Once a tax controversy arises, immediate actions must be taken. Timing is essential as a delay may turn a tax controversy into a disaster.