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What happens when you request an appeal of a tax matter?

Posted on July 22, 2023

What if the IRS has ruled against you in a specific matter? What are your choices, and what can you expect?

According to our CPA team, who have helped represent many individuals who disagree with an IRS decision, you may be able to avoid the time and expense of a court trial by asking the IRS Independent Office of Appeals to review your case.

The Independent Appeals office is separate from the rest of the IRS, so when Appeals officers review a case submitted by a taxpayer, they meet with taxpayers informally and consider their position and the IRS’s position in a fair and unbiased manner.

Here’s generally how the appeals process works:

  1. To submit an appeal request, you mail your requestin writing to the office that sent you the letter – stating your appeal clearly. For information on filing a formal written protest or a Small Case Request, you can review Publication 5, Your Appeal Rights and How To Prepare a Protest If You Disagree.
  2. The IRS department that receives your request will consider your protest and attempt to resolve the disputed tax issues. If that office can’t resolve your issue, they will forward the case to Appeals for consideration.
  3. Once the request is with Appeals, the Appeals officer will contact you within 45 days by mail to schedule an informal conference to review your situation. Appeals conducts conferences by phone, in person and by video conference. You may choose which type of conference you prefer.
  4. At the conference, the Appeals officer discusses the law as it applies to the facts of your case, including court rulings on similar cases. Your CPA or representative may be with you during that conference.
  5. If you haven’t heard about your appeal and it’s been more than 120 days since you filed a request, you are entitled to ask for astatus update by contacting the IRS exam or collection office you worked with.
  6. If you have been asked to send new information or documents to Appeals, the Appeals officer may need to send the case back to the original IRS department to review the new information.Appeals will not raise new issues or reopen issues agreed to by you or the IRS except in cases of potential fraud or malfeasance.
  7. Appeals officers review the facts, the law, your comments, and information presented by you and IRS exam or collection office before they make a final decision. They must also explain the reasons for the decision and their options.

Generally, there are three outcomes of an appeal:

  • In the IRS’ favor:If the facts and laws support the government’s position, the Appeals officer recommends that the taxpayer concede and give up the issue.
  • In the taxpayer’s favor:If the law and facts support the taxpayer’s position or courts have ruled in favor of taxpayers in similar cases, the Appeals officer recommends that the IRS concede and give up the issue.
  • Compromise:The Appeals officer may recommend a compromise when the facts or laws are unclear, or the courts have made different rulings on similar cases. In this situation, Appeals may recommend a settlement where the taxpayer pays a percentage of the tax due.

The CPAs at Teipen CPA Group adds that it’s important to understand that interest on any unpaid balance a taxpayer owes as Appeals reviews a case will continue to accrue. That’s one reason we encourage our clients to get their appeal process going as soon as possible.

As always, we are happy to weigh in on any tax appeal issue you have, and help you through the process.