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How to Appeal an IRS Decision

March 23, 2023

If the IRS has determined that you owe taxes, and has assessed a penalty against you or taken collection action, you may be able to file an appeal. However, there are a variety of rules and deadlines that apply when you appeal an IRS decision. Failing to comply with these provisions can result in losing your rights. Before you appeal, consider these key issues:

Are You Eligible to Appeal an IRS Decision?

An appeal is not available in every case. Under IRS rules, an appeal may be appropriate if you meet all of the following conditions:

  1. You received a letter from the IRS explaining your right to appeal the IRS’s decision;
  2. You did not agree with the IRS’s decision; and
  3. You are not signing the agreement form sent to you by the IRS.

Alternatively, an appeal may not be right for you if:

  1. You only received a bill from the IRS and there was no mention of an appeal;
  2. You did not provide all information requested to help support your position during the audit; or
  3. Your only concern is your lack of ability to pay – not the legitimacy of the amount.

Should You Appeal an IRS Decision?

While you may be unhappy with a decision, an appeal is a time-consuming and difficult process. When deciding whether to move forward with an appeal, consider whether you believe any of the following occurred: 

  1. Did the IRS make an incorrect decision based on a misinterpretation of the law?
  2. Did the IRS improperly apply the law due to a misunderstanding of the facts? 
  3. Is the IRS taking inappropriate collection action against you or was your offer in compromise denied?  o
  4. Did the IRS rely on incorrect facts? 

If you believe one of these occurred, you must be prepared to argue and support your position with appropriate documentation.

How Do You Appeal an IRS Decision?

Assuming you meet the appeal criteria, you may request an appeal by completing a formal written protest and mailing it to the IRS address indicated on the letter you received explaining your appeal rights. 

If the entire amount of additional tax and penalties imposed for each tax period from an audit is less than $25,000,  you may submit a Small Case Request instead of a formal written protest.

What Should You Expect in an Appeal?

If, after receiving your appeal, the IRS believes you qualify for an appeal, it will review the issues of your case with a fresh, objective perspective. A conference will then be scheduled with you. This is usually informal and may be conducted by telephone, video conference, or in person.

The IRS will consider any reason for disagreement with its decision, except those based on morals, religion, politics, the Constitution, conscientious objections or similar grounds.

In an appeal, both sides have rights and responsibilities. The IRS is committed to abiding by the Taxpayer Bill of Rights, which means the agency must explain your appeal rights and the process, listen to your concerns, and be timely, responsive, fair, and impartial in their response. 

Your responsibilities as a taxpayer require that you state the issues that you disagree with and explain why you disagree, including your understanding of the facts and law in your case. You should also provide any additional information or documentation that may be helpful to your case, and be timely and responsive to the IRS’s requests.

Should You Hire a Tax Attorney to Handle Your Appeal?

Advocating for your position in an appeal is difficult, and the consequences of losing your case are significant. Our attorneys are experienced in handling tax problems at the audit and appeal stages. We can help you determine whether to appeal and, if so, how to achieve the best result in your tax matter.

Contact us for a consultation.

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