Understanding IRS Appeals: A Guide to What to Expect
Overview of IRS Appeals
Navigating an IRS appeal can be a confusing and daunting process, but understanding what to expect and how to prepare can make it more manageable. Here’s a quick guide to what you should know about preparing for and attending a meeting with the IRS Independent Office of Appeals.
Unfamiliar with the IRS Independent Office of Appeals? Check out What is IRS Appeals? first.
Ways to Appeal Your Case
There are three main routes through which you can appeal to the IRS Office of Appeals:
- Examination Action: This includes decisions from an IRS audit or issues such as the denial of penalty abatement.
- Collection Action: Examples include the IRS placing a lien on your property, levying your bank account, or denying an offer in compromise.
- Litigation: If you’ve filed a Tax Court petition and haven’t discussed your case with Appeals, in some instances, you may attempt to resolve your case with the IRS Office of Appeals before proceeding to Tax Court.
Each of these routes requires careful attention to detail and adherence to deadlines. Missed deadlines can forfeit your appeal rights, leaving litigation as the only option, which is generally more expensive and time-consuming than working with IRS Appeals.
Steps to Take After Receiving an Appeal Notice
Upon receiving a letter from the IRS indicating you have appeal rights, it’s crucial to act promptly. Typically, you have 30 or 60 days to file your appeal.
- Small Case Request: For issues where the amount in dispute is $25,000 or less, particularly for examination issues, you can file a small case request. This involves a simple form explaining why you disagree with the IRS’s findings.
- Formal Appeal: For more complex cases or even for those qualifying for a small case request, a formal appeal request might be necessary. This detailed document should include a statement of disagreement, legal analysis, and supporting documentation. It’s similar to a brief prepared for court, but is more informal and tailored for the Appeals process.
Preparing Your Appeal
A well-prepared appeal can significantly impact the outcome of your case. I recommend being thorough in your formal appeal, as this can sometimes lead to a favorable ruling without the need for an in-person or virtual meeting. In a recent case, a detailed formal appeal I drafted led to an IRS refund being issued without a hearing with an Appeals officer.
The Appeals Conference
Once your appeal is filed, the IRS Office of Appeals will assign your case to an appeals officer, typically within a few months. You’ll receive a letter detailing the scheduled appeals conference, which can be conducted by telephone, virtually, or in person.
The appeals conference is informal compared to court proceedings. It’s an opportunity to explain your position and provide additional information. While many opt for telephone or virtual meetings, in-person meetings can be beneficial, especially for high-stakes cases. Personal interactions can sometimes lead to more favorable outcomes.
After the Appeals Conference
The appeals officer will review all information and make a determination, which can take several months depending on the complexity of the case. You will receive a letter with the outcome of the appeal. If you agree with the decision, the case will be resolved accordingly. If not, you still have the option to take your case to court.
Key Takeaways
- Check Your Mail: Ensure you open and read all correspondence from the IRS to avoid missing important deadlines.
- File Promptly: Adhere to deadlines for filing your appeal to preserve your rights.
- Prepare Thoroughly: A detailed formal appeal can simplify the process and potentially resolve the issue without further hearings.
- Consider In-Person Meetings: For high-stakes cases, an in-person meeting with the Appeals officer might be advantageous.
Navigating the appeals process can be complex, but with careful preparation and timely action, you can effectively manage your case. For additional guidance or questions about IRS appeals, don’t hesitate to contact us.