Discrepancies involved in tax collection, proposed tax assessments, or other IRS actions can increase a taxpayer’s grievances. Once you receive a final notice from the IRS, you may seek tax dispute resolution through legal intervention. Filing appeals is a preferable, yet less formal approach than other court proceedings, but is independent of judicial mandates of evidence or procedure. In the past, appeals have helped settle a significant number of cases. Let us take a closer look at the various aspects of Appeals, and how you can benefit from the process.
What is an appeal?
Created in 1927, the Internal Revenue Service (IRS) Office of Appeals (Appeals) is responsible for the resolution of tax disputes without litigation, or on grounds that are fair and impartial to both the taxpayer and Government. Appeals, therefore, help in enhancing voluntary compliance and instill confidence in the general public in the efficiency and integrity of the IRS.
After you receive an IRS letter of adjustment you get 30 days to appeal. That period of 30 days is to let you appeal against any inaccuracies or errors in the report; for which you need to contact The IRS Appeals Division. If you disagree with the IRS’s determination and want to be prepared with the required information for future IRS appeals.
Taxpayer Bill of Rights
More than 100,000 taxpayers go through the IRS Tax Appeals process every year to reconcile their differences with IRS determinations on the tax obligations. It is your right as a taxpayer to contest IRS decisions that you do not agree with. However, simply disagreeing is not enough, as you need to know the process and your rights as enshrined in the Taxpayer Bill or Rights. Let us take a closer look at your rights as a taxpayer, which you must be familiar with to successfully appeal against an IRS determination.
Taxpayer rights in the Taxpayer Bill of Rights; these can be narrowed down into a list of 10, which are listed below.
- The right to be informed
- The right to quality service
- The right to pay no more than the correct amount of tax
- The right to challenge the IRS’s position and be heard
- The right to appeal an IRS decision in an independent forum
- The right to finality
- The right to privacy
- The right to confidentiality
- The right to retain representation
- The right to a fair and just tax system
The IRS Office of Appeals
The Office of Appeals is an independent organization within the IRS whose mission is to help taxpayers and the government resolve tax disagreements. Appeals do not seek to take sides in a dispute. They offer an objective point of view on each individual case. Each case is reviewed after the applicable IRS compliance has made its decision. The Office of Appeals works to resolve disagreements on a fair and impartial basis for both the taxpayer and the government.
According to the IRS Restructuring and Reform Act of 1998, the IRS Commissioner is directed to develop and implement plans to reorganize the IRS, by establishing organizational units that cater to particular taxpayer segments with similar needs. It also specifies that a self-sufficient Appeals function must be included within the IRS that is free from any “ex parte” communications between Appeals auditors and other IRS employees. Through this provision, the Appeals avoids any conflict of interests or compromises with the IRS, helping resolve common taxpayer grievances.
As a taxpayer, you are entitled to dispute the results of an IRS assessment through the administrative appeal process for any reason other than religious, moral or political, conscientious objections.
What IRS Decisions Can You Appeal?
As a taxpayer, you reserve the right to appeal against most decisions and actions during the IRS tax process. You can file an IRS disagreement appeal whether pertaining to penalties, liens, levies, innocent spouse appeal, Offer in Compromise, or anything else under the IRS taxation. You can exercise your right to challenge the IRS position and be heard before the IRS Office of Appeals on the matters listed below.
- Audit or examination determinations are not correct as per the data maintained
- If you believe the IRS made an incorrect decision based on a misinterpretation of the law, check the publications under Tax Topics on the IRS website.
- If you believe the IRS did not properly apply the law due to a misunderstanding of the facts, be prepared to clarify and support your position.
- If you believe the IRS is taking inappropriate collection action against you, or your offer in compromise was denied and you disagree with that decision, be prepared to clarify and support your position.
- If you believe the facts used by the IRS are incorrect, then you should have organized records or other evidence to support your position
Appealing a Collection Decision
Some of the appeal procedures that taxpayers may use during IRS appeals are:
1. Collection Appeals Program (CAP)
Taxpayers may go through the CAP process if the issue involves collection actions to do with a lien, seizure, levy, rejection, termination, and modification of an Installment Agreement. They can call the IRS appeals phone number and explain their reason for disagreement, and be prepared to propose a solution within IRS appeals settlement guidelines.
2. Collection Due Process (CDP)
Taxpayers are entitled to a Collection Due Process (CDP) if the IRS sends them a notice that states they have the right to request a CDP hearing including a Notice of Federal Tax Lien Filing along with their Right to a Hearing Under IRC 6320, Final Notice of Intent to Levy, Notice of Jeopardy Levy and Right of Appeal, Notice of Levy on taxpayer’s State Tax Refund, and Post Levy Collection Due Process (CDP) Notice.
3. Offer in Compromise (OIC)
An Offer in Compromise (OIC) refers to an agreement between the government and a taxpayer settling a tax liability for less than what is owed. If a taxpayer receives a letter notifying them that their offer has been rejected, they can appeal the IRS decision within 30 days from the date on the letter.
4. Trust Fund Recovery Penalty (TFRP)
Taxpayers can appeal the IRS’ proposed assessment of the trust fund recovery penalty if they were not responsible for collecting or withholding, accounting for or, and depositing or paying specified taxes on behalf of the employer. Responsible taxpayers can be owners of corporations, officers, partners within organizations, or employees of any firm.
How to Appeal an IRS Decision?
If you do not agree with your tax determination, you may request an Appeals conference by filing a written certified public accountant, attorney, or authorized agent practicing before the IRS. You may represent yourself, or have professional representation. The professionals as representatives must produce a copy of a power of attorney: Form 2848, also known as the Power of Attorney and Declaration of Representative.
How to Write a Letter to Appeal to the IRS?
Before the IRS Examination or Collection officer who initiated a collection action sends a taxpayer’s case to appeals, they will attempt to resolve the tax issues at their level. If they fail to do so, they will forward it to Appeals for consideration. Taxpayers must file a formal written protest to request a conference with the Appeals Office unless they qualify under the Small Case Request procedure.
Here is a list of the things to include when writing a letter of appeal against an IRS decision:
- The tax period for which you are protesting
- A list of each proposed item and the reason/fact for your disagreement
- Facts to prove your protest
- Perjury statement that information provided is true and authentic
- Your name, address, and a telephone number to reach you as well as your signature under the penalties of perjury statement
The letter of appeal should be sent to the IRS appeals office mailing address before or on the 30th day after the receipt of the letter from the IRS. After that period, the appeal sent to seek IRS problem resolution will not be entertained.
Filing a Small Case Request
Taxpayers may submit an IRS appeal letter for Small Case Request if the entire amount of tax and the related penalty is $25,000 or less. If they are appealing the denial of an offer in compromise, the entire amount for each tax period must include total unpaid taxes, interests, and penalties. Employee plans, S corporation partnerships, and exempt organizations are not eligible for Small Case Requests.
IRS Appeals Settlement Guidelines
Once your case qualifies for an appeal, an Appeals agent will review it and schedule a conference with you. Appeals conferences are informal and conducted through correspondence or over the telephone. Differences are often settled without going to trial. Reasons for disagreement that are sufficient for the Appeals to consider your case include, political, religious, constitutional, and conscientious objections. In addition, you must provide all relevant information and requested documentation to the auditor or revenue officer working on your tax dispute resolution.
IRS Appeals Guide
You may represent yourself, or have a professional represent you, when appealing an IRS decision. The representative must be an attorney, an Enrolled Agent, or a CPA. If you are preparing to file an appeal letter by yourself, you may seek more information about the IRS appeal forms required, IRS mailing address by calling on your local Taxpayer Assistance Center phone number. You can also access the IRS website for helpful video tutorials and appeals guides.
Filing a request for an IRS appeal is a very detailed and very confusing process for the average individual. The Collections Appeal Process (CAP) and the Collection Due Process (CDP) as well as the Small Case Request require certain forms, a Formal Letter of Protest to include a list of each proposed item with which you disagree, the reason(s) you disagree with each item, the facts that support your position on each item, and the law or authority, if any, that supports your position on each item. Yes, you read that correctly. The IRS requests that you, the average citizen, provide the law. You need help and you need it immediately. The Law Offices of Nick Nemeth and his team of professionals are here to help you. It is very unwise to speak to the IRS or attempt to file the appeal yourself. The tax laws and codes are in a cryptic language that only a professional, experienced tax attorney can understand.
The IRS Appeal Guide will walk you through the steps to file an appeal. Think twice about taking those steps alone. It is a very lengthy, complicated process. IRS appeals are very time-sensitive, and you do not have weeks and weeks to attempt to figure out exactly what the IRS wants. A professional tax attorney will handle all filing of appeals and all communications with the IRS for you.
Got an IRS Tax Problem? We Can Help!
Appealing your own case can get complicated. Let Nick Nemeth and his team help you navigate the IRS tax appeals process. You have the right to retain legal counsel, and our team has some of the best you can find. Let us help you resolve your IRS tax debt issues. To discuss the specifics of your case and get answers to your questions, call us at 972 627-4580 or write to us at jamie@myIRSteam.com . You can also send a message, and we will take it from there.
