About An IRS Tax Appeal
If your tax return was recently under examination and you received written notification of an adjustment the IRS is making to your tax return, such as disallowing a deduction or credit, you have the right to disagree and the right to appeal its decision. An IRS Tax Appeal is a common way to resolve disagreements you have with the IRS that relate to items you report on your return.
But IRS audits aren’t the only thing taxpayers can appeal. You also have the right to question:
- IRS collection actions, such as liens, levies, seizures and installment-agreement terminations.
- Rejected offers in compromise to settle tax bills.
- Penalties and interest the IRS adds to your tax bill.
- And more
While the audit and collection processes are about the IRS getting as much money as possible, the IRS Tax Appeal process is about finding a settlement for the matter.
The appeals conference is an informal meeting in which an impartial officer settles the dispute in the same way a judge does between a plaintiff and defendant in court. Appeals is a separate and independent IRS office where disagreements concerning the application of tax law can be resolved on a fair basis for both the taxpayer and the government. The mission of Appeals is to settle tax disagreements without having to go to the Courts and a formal trial. You are entitled to hire a practitioner to represent you at the conference provided they are authorized to practice before the IRS, such as an enrolled agent, attorney or CPA. If you are unsatisfied with the officer’s decision, you may then file suit in court.
What Can Be Appealed?
Generally any type of decision or action taken by the IRS can be appealed such as:
- Audits/Examination Determinations
- Offers in Compromise
- Requests for Penalty Abatement or Removal
- Innocent Spouse Decisions
- Installment Payment Plans
However, you just have to know the tax code and whether an IRS tax appeal is a viable solution to your problem. Tax Samaritan does and can help you determine if an IRS tax appeal is recommended for your situation.
Is An IRS Tax Appeal The Solution To Your Tax Problem?
IRS tax appeals are a common way to resolve disagreements you have with the IRS that relate to items you report on your return. IRS Appeals could be the solution to your tax problem if ALL of the following apply:
- You received a letter from the IRS explaining your right to appeal the IRS’s decision.
- You do not agree with the IRS’s decision and you have a valid argument to appeal
If you decide to go this route, there are procedures you must follow to insure you retain your right to an appeal. You must file a Request for Appeals Review within the legal time frame, generally within 30 days, and follow the IRS guidelines for an appeals request to be valid.
Appeals is not for you if any of the following apply:
- The correspondence you received from the IRS was a bill and there was no mention of Appeals.
- Your only concern is that you cannot afford to pay the amount you owe.
The objective of the IRS Appeals Division is to resolve disputes between taxpayers and the IRS. The rules governing the appeals process are precise and must be adhered to. The appeal is your chance to restate you case and explain why you should be given another evaluation – a chance that should not be wasted without professional representation.
If you are unsure whether you should appeal your tax dispute, please contact Tax Samaritan for a free 30-minute consultation to determine whether you have a valid dispute that the:
- IRS made an incorrect decision based on a misinterpretation of the law.
- IRS did not properly apply the law due to a misunderstanding of the facts.
- IRS is taking inappropriate collection action against you, or your offer in compromise was denied.
If you believe the facts used by the IRS are incorrect, then you should have records or other evidence to support your position. Tax Samaritan can represent your position effectively with an IRS Tax Appeal.
Preparing A Request For IRS Tax Appeal
One way to start the IRS tax appeal process is to find an experienced tax professional to do the proper research on your tax situation and submit a formal protest letter. The protest letter will state that you disagree with the IRS determination and provide reasons supporting your position.
If you disagree with the IRS’s determination, a formal written protest is required in all cases to request an Appeals conference, unless you qualify for the small case request procedure discussed below or another special appeal procedure. You may represent yourself, or have a professional represent you – the representative must be an enrolled agent (EA), attorney or a certified public accountant (CPA).
A written protest must include your personal contact information, an affirmative statement that you are requesting your right to an appeal, a copy of the notification you received from the IRS, the relevant tax years that give rise to the dispute and statements of law and fact that support your tax return position.
If the amount in dispute, including penalties the IRS assesses, is $25,000 or less, you can submit an informal small-case request. A small-case request generally relieves you of the obligation to submit formal protest documentation. Nevertheless, statements of law and fact that support your tax return position are still necessary for a successful outcome with your tax appeal. You must be prepared to clarify and support your position.
In each case where you believe the facts used by the IRS are incorrect, you will want to make sure you have records or other support available to back up your position.
While you don’t have to have professional representation at an Appeals Office meeting and can go it alone, an experienced representative, such as Tax Samaritan, can save you significant time and headaches and in ensuring that you have the best possible outcome with an IRS tax appeal.
What Can You Expect from Appeals?
If your case qualifies for an IRS tax appeal, an Appeals employee will review the issues of your case with a fresh, objective perspective and schedule a conference with you. Appeals conferences are informal and conducted by correspondence, telephone or in person. Most differences are settled in these appeals without expensive and time-consuming court trials.
During a hearing, which will be held at the IRS Appeals Officer’s office or by telephone, we will present your case on your behalf. Our goal is to resolve your tax problem as expeditiously as possible.
We will negotiate a settlement for you at that appeals hearing. If a settlement is reached, then the IRS Appeals Officer will issue a Form 870, Consent to Proposed Tax Adjustment. By signing this formal document, you agree to pay the amount of the settlement, and you can no longer challenge the existing tax issue and/or tax case.
If the appeals officer agrees with the IRS, you have the option of challenging the IRS in court. If you choose to pursue the issue in court, you can pay the amount of tax in dispute and file the appropriate documentation in a U.S. District Court or the Court of Federal Claims for a refund. If you are unable to or refuse to pay the tax, then only the U.S. Tax Court has jurisdiction over your case.
Further information on taxpayer appeals is available in IRS Publication 5, Your Appeal Rights. Keep in mind that during all levels of appeals you must have valid legal reasons based on current tax law for disagreeing with the IRS. You cannot appeal your case based only on moral, religious, political, constitutional or conscientious grounds.
You need expert representation on your side to fight for your rights! If you need to file an appeal with the IRS, let our team of enrolled agents help you settle your tax dispute.
While the IRS tax appeal process may take several months to complete, taxpayers may generally achieve significant savings on their tax bill.
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