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Taxpayers can resolve disputes with the IRS without going to Tax Court through the IRS independent Office of Appeals, which offers an impartial forum wherein the Appeals Officer is precluded from siding with the auditor or collection agent in any dispute.
Understanding the Appeals Process – IRS Tax Audit
The 30-Day Letter
If your tax return was selected by the IRS for examination, within a few weeks after your closing conference with the auditor and/or supervisor, you will receive a package that includes:
- A letter (known as the 30-day letter) notifying you of your right to appeal the proposed changes within 30 days.
- A copy of the examination report explaining the examiner’s proposed changes.
- An agreement or waiver form.
You generally have 30 days from the date of the 30-day letter to tell the IRS whether you will accept or appeal the proposed changes. The letter will explain what steps you should take, depending on which action you choose.
If you do not respond to the 30-day letter, or if you later do not reach an agreement with an Appeals Office, the IRS will send you a 90-day letter, which is known as a Notice of Deficiency.
The Protest Letter Many taxpayers are unsatisfied with the results of an audit where they don’t have adequate representation or any representation at all. If you do not agree with your auditor’s findings, you do not have to accept the results of the examination.
If you disagree with the proposed changes outlined in the 30-day letter, your tax attorney can advise you as to whether a formal written protest is necessary and what information to include in that letter. Your attorney will prepare a formal written protest, if necessary, to advocate for reconsideration of the proposed examination changes based on your specific circumstances and underlying documentation.
The formal written protest must include:
- The proposals with which you disagree.
- The reasons why you disagree with the proposals.
- The facts which support your reasoning.
- The relevant law or laws which support your reasoning.
Appealing an IRS Collection
In addition to appealing the findings of an IRS audit, you may also appeal an IRS collection decision through the Office of Appeals. Depending on your circumstances, it may be possible to appeal tax liens, levies, and property seizures.
There are two procedures a taxpayer can initiated to appeal collection actions:
- Collection Due Process (CDP)
- Collection Appeals Program (CAP)
Collection Due Process
CDP is available for taxpayers who have received any of the following:
Collection Appeals Program
CAP is available to taxpayers subject to:
- Levies and property seizures
- Notice of Federal Tax Liens
- Rejection, termination or proposed termination or modification of an installment agreement.
Settlement on Appeal
An Appeals Officer has the discretion and authority to determine whether to accept a taxpayer’s position, whether challenging an IRS audit or an IRS collection action. Working with an experienced tax attorney can increase your chances of successfully appealing IRS determinations and resoling your tax liabilities effectively. The attorney-client privilege protects all client communication from disclosure and moreover, precludes attorneys from being called to act as witness where they were not involved in the preparation of your original tax return. Few attorneys are competent to handle the complexities of taxation within the context of an audit or an appeal. The tax attorneys at Segal, Cohen and Landis have extensive experience in handling IRS appeals and have been successfully resolving their clients’ IRS problems for over thirty years.
Need Help with IRS Appeals?
Please feel free to contact us regarding your IRS Appeals. Every tax matter is unique because every person’s situation is unique. We can quickly and efficiently analyze your circumstances and propose various options of resolution.
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