IRS Appeals an Option for Tax Disputes
Possible Avenue for Fighting Increased Tax Burden, Penalties
Experiencing an IRS audit is bad enough, but what if the outcome is so one-sided that you just can’t accept it without putting up a fight?
That’s where an appeal comes in. The IRS has an appeals branch that gives taxpayers an opportunity to dispute an IRS ruling before tax court becomes necessary.
The IRS Office of Appeals serves as an impartial arbitrator of tax disputes, where taxpayers can raise objections to an IRS decision regarding tax adjustments, penalties, or IRS levies. Its officials are staffed with former auditors with years of experience, and give fresh eyes to your case that can hopefully see things your way.
If the IRS’s decision touches on a new issue unfamiliar to the IRS, then an appeal may be a smart decision, as it’s an extra opportunity to express your argument. It’s also an option for when the IRS gets the facts of your case wrong, if you believe the IRS misapplied the law to your situation, or if you believe the IRS is waging inappropriate collection action.
You can file a written protest detailing your case, or you could have a tax attorney do it for you. Partnerships or S Corporations are better suited for written protests.
If your case involves an amount less than $25,000, you’ll likely file a Small Case Request.
There will also be a taxpayer conference, where your case is considered by an IRS appeals officer. The conferences are conducted via telephone, in-person, or via written correspondence. They’re informal, so the pressure won’t be too much to handle.
Winning an IRS appeal can be a game-changer for your tax situation. They may not be won all the time, but the process normally takes about 90 days. While you can represent yourself in an IRS appeal, being represented by a tax attorney or tax professional can increase your chances of victory.
Also, waging an IRS appeal delays your tax bill’s due date, sometimes giving you a few additional months. That’s extra precious time to gather extra funds to pay your back taxes or to get an installment plan in the works.
One downside to filing an IRS appeal is that if unreported information is discovered by the appeals officer, then that could factor into an unfavorable decision. Regardless, resolving your tax burden with an appeal is an option for American tax payers.
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