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What to expect after requesting an IRS appeal of a tax matter

2023-06-14

A taxpayer who disagrees with an IRS decision may be able to avoid the time and expense of a court trial by asking the IRS Independent Office of Appeals to review their case.

IRS Appeals is separate from the rest of the IRS. When Appeals officers review cases submitted by taxpayers, they meet with taxpayers informally and consider their position and the IRS’s position in a fair and unbiased manner.

Interest continues to add up on any unpaid balance a taxpayer owes as Appeals reviews a case.

IRS Publication 5, “Your Appeal Rights and How To Prepare a Protest If You Disagree”, has information on filing a formal written protest or a Small Case Request.

Overview of the appeals process
  1. If appeal is an option, the IRS office handling a matter with the taxpayer send the taxpayer a letter advising them of their appeal rights.
  2. Taxpayers mail a written appeal request to the IRS that sent them the letter advising of appeal rights.
  3. That IRS office will consider taxpayer’s request and try to resolve the disputed tax issues.
  4. If that office can’t resolve the issues, it will forward the case to Appeals for consideration.
  5. Once the request is received by IRS Appeals, the Appeals officer should contact the taxpayer within 45 days by mail to schedule an informal conference to review the taxpayer’s situation. Appeals conducts conferences by phone, in person and by video. Taxpayers may choose which type of conference they prefer.
  6. A taxpayer who hasn’t heard about their appeal within 120 days after filing their request can ask for a status update by contacting the IRS exam or collection office they worked with last.
  7. If the taxpayer sends new information or documents to Appeals, the Appeals officer may need to send the case back to the original IRS office to review and respond to the new information.
  8. Appeals will not raise new issues or reopen issues agreed to by the taxpayer or the IRS, except in cases of potential fraud or malfeasance.
  9. The Appeals officer discusses the law as it applies to the facts of the case with the taxpayer at the appeals conference, including court rulings on similar cases.
  10. Appeals officers review the facts, the law, the taxpayer’s comments, and information presented by the taxpayer and IRS exam or collection office before they make a final decision.
  11. Appeals officers will also explain to the taxpayer the reasons for the decision and taxpayer’s options.
  12. There are 3 typical outcomes of an appeal: (1) in the IRS’ favor; (2) in taxpayer’s favor; or (3) Compromise, e.g.,if the facts or laws are unclear, or courts have made different rulings on similar cases, Appeals may recommend a settlement where the taxpayer pays a percentage of the tax due.