When dealing with tax matters, it’s not uncommon to find yourself in a situation where you may disagree with the IRS on one or more issues. When this happens, you have several options to find a resolution, such as going to tax court or filing an appeal. Tax court cases take a minimum of six months but can last up to several years before a ruling is handed down. During that time, the interest on your tax bill will continue to accrue, which can lead to a hefty bill. An IRS appeal, on the other hand, can save you time and money. Before you decide to jump on the appeal bandwagon, however, be sure you understand the appeal process and what to expect after requesting one.
Requesting an IRS Appeal
An IRS appeal provides an opportunity to resolve tax disputes without having to go to court. It is a formal process where an independent appeals officer reviews your case and considers the evidence and arguments presented by both parties. This impartial review can often lead to a fair resolution or compromise that satisfies both you and the IRS.
To request an appeal, you must submit it in writing to the office indicated in the letter with your appeal rights. Be sure to review Publication 5, Your Appeals Rights and How to Prepare a Protest If You Disagree. This free resource includes helpful information for filing an appeal after denial of an Offer in Compromise, penalty abatement, innocent spouse relief, and other disputes resulting from a tax return examination. You can also reach out to a tax professional for assistance, if necessary.
What Happens After You Request an IRS Appeal?
Once you have requested an IRS appeal, the next step is to wait for the appeal to be assigned to an appeals officer. The appeals officer acts as a mediator between you and the IRS, facilitating communication and helping to resolve the dispute. It is crucial to maintain a professional and respectful demeanor when interacting with the appeals officer.
Here is a brief overview of what happens after your request is received and an officer is assigned:
1. Set a Conference Date
Your assigned appeals officer will contact you by mail within 45 days to schedule an informal conference. The conference can take place by phone, video chat, or in person. You can choose whichever type of meeting you prefer. If it’s been more than 120 days since you filed your request and you haven’t heard from anyone, call the number listed on your last notice and request a status update.
2. Prepare For Your Appeals Conference
Once you choose the type of conference and a date is set, it’s time to prepare for the meeting. Start by reviewing your original tax return, the IRS’s decision, and any correspondence or notices related to the issue at hand. It is essential to understand the specific reasons for the IRS’s decision and identify any errors or misunderstandings that may have occurred.
Gathering supporting documentation is a critical part of your preparation. This may include financial records, receipts, invoices, legal documents, or any other evidence that supports your position. Ensure that you have all the necessary documents well-organized and easily accessible for presentation during the appeal process.
3. Present Your Case During The IRS Appeal
When presenting your case, it is essential to be well-prepared and organized. Begin by outlining your main arguments and supporting evidence. Clearly state your position and explain why you believe the IRS’s decision is incorrect or unfair. Use concrete examples and cite relevant tax laws or regulations to strengthen your case.
During the appeal conference, both you and the IRS will have the chance to present your arguments and respond to each other’s points. The appeals officer will ask questions, seek clarifications, and mediate the discussion. It is crucial to remain calm, focused, and respectful during the conference, as this can greatly influence the outcome of the appeal.
4. Wait for a Decision
Once the appeals officer has reviewed all the evidence and arguments presented, they will make a decision based on their findings. The appeals officer will issue a written determination outlining their decision and the reasons behind it. Generally, there are three outcomes:
- In your favor – The IRS will adjust the tax assessment accordingly, and the matter will be resolved.
- Compromise – In this situation, they may recommend a settlement where you pay a percentage of the tax due.
- In favor of the IRS – If the decision is not in your favor, you may have the option to further appeal to the U.S. Tax Court or explore other legal remedies.
After receiving the IRS appeal decision, it is essential to carefully review the determination and consider the available options. If the decision is favorable, ensure that the necessary adjustments are made to your tax account. Any outstanding balances should also be resolved. For an unfavorable decision, consult with a tax professional to discuss the possibility of pursuing further legal action or negotiating a settlement with the IRS.
If you need help with your IRS appeal, contact Tax Defense Network for expert guidance and support. Call 855-476-6920 for a free consultation and quote today!