Appealing an IRS Audit
You can (almost) always appeal IRS decisions. You can appeal an IRS audit in the same manner that you appeal a court case. Appealing your case also tables or delays the requirement to pay, which can be months. This additional time makes it easier for you to work out an installment plan or save the funds necessary to pay the final debt.
What is the Appeals Process?
When you receive an official IRS decision after an audit, you have up to 30 days to file an appeal. (You can still appeal even after the 30-day deadline, although the process is more difficult.) It is important to note that appeals may only be made because you disagree with the government’s determination and not due to a dispute based on political, religious, moral, or similar grounds. Please do not argue that income taxes are illegal.
In addition to your name, contact details, and a statement that you want to appeal the IRS findings, your written dispute must include the following:
A copy of the IRS letter with the proposed changes
The tax period(s) or year(s) involved
The findings that you disagree with
The reasons for the disagreement and the facts that support these reasons
Applicable law or laws that support your position
If you owe less than $2,500, you can request an appeal from your auditor. If the tax liability you are appealing is between $2,500 and $25,000, you can submit Form 12203 to file a Small Case Request instead of request a conference. Small Case Requests are available to everyone except:
Partnerships
S-Corporations
Exempt organizations
Employee plans
If you owe more than $25,000, your only option is to file a Form 12203.
What Happens After You File the Audit Dispute?
Upon receipt of your dispute, an IRS Appeals Officer is assigned to your case. They provide taxpayers with an impartial platform to plead their cases and usually try to avoid litigation by finding solutions that encourage voluntary compliance with your tax obligation. Lawsuits are expensive, and the IRS would rather settle without one.
You usually have 60 days to prepare for the hearing, where you will be given the opportunity to present your case, complete with documentation, statements, receipts, and other financial information. The Appeals Officer will review all evidence and listen to any legal arguments before making a final determination.
Most disputes with the IRS are settled at the appeals stage. If you succeed at reaching a settlement, the IRS will provide you with a Form 870- Consent to Proposed Tax Adjustment. If you sign it, you are effectively consenting to the settlement and cannot challenge it in the future. If the conference fails to produce an agreement, you can petition the U.S. Tax Court within 90 days of receiving a Notice of Deficiency, also known as a 90-day letter.
Although appealing an IRS audit can substantially reduce previously assessed taxes and penalties, a comparatively low number of taxpayers appeal their audit results. While some of them just want to get it over with, others feel that they have no chance against the IRS and its resources. It’s an imbalance that you can eliminate by engaging a Tax Attorney.
Contact Safeguard Law, PLLC
Receiving a letter or notice of proposed adjustment from the IRS can be incredibly stressful. At Safeguard Law, PLLC we will help you navigate the audit or review the accuracy of the assessment, look for ways to minimize any tax liability and propose a payment for the remaining balance.