IRS Appeal Process and Timeline

by
IRS Appeal Process and Timeline

What are Taxpayers Rights to Appeal IRS Decisions?

The IRS created fundamental rights (The Taxpayer Bill of Rights) that everyone is entitled to when the IRS contacts them about a federal tax problem. One of the TBOR rights is to be able to “appeal an IRS decision in an independent forum.”

IRS appeals requests are reviewed by the Office of Appeals, an independent IRS organization separate from collections. In some cases, appeals will also be heard by a U.S. Tax Court, U.S. District Court, or Federal Claims Court depending on the specific tax issue.

The IRS also offers help from the Taxpayer Advocate Service (TAS), another independent entity that is part of the IRS. Taxpayers having difficulty resolving their tax problems or experiencing undue hardship as a result of an IRS dispute may qualify for TAS assistance.

In addition to IRS appeals rights, here are additional core TBOR rights:

  • The Right to Confidentiality
  • The Right to Finality
  • The Right to Privacy
  • The Right to Retain Representation
  • 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

What IRS Tax Matters Can Be Appealed?

When a taxpayer disagrees with a decision made by the IRS, they can appeal that decision by filing a formal request letter specific to their situation.

Examples of tax matters that can be appealed include:

  • Audits that increase the amount of taxes owed by the taxpayer.
  • Changes made to a tax return by the IRS that the taxpayer does not agree with.
  • Collections issues associated with amount of unpaid taxes owed to the IRS by the taxpayer.
  • Denial by the IRS to accept a taxpayer’s Offer in Comprise or other payment plan intended to make it easier to repay tax debt.
  • Penalties incurred by a taxpayer for failing to pay back taxes when the taxpayer does not agree with the back taxes amount.
  • Joint tax liability disputes.

The Collections Appeals Program (CAP) is part of the IRS and further gives additional circumstances under which appeals can be filed:

  • Before or after a taxpayer is served a notice of levy.
  • Before or after the IRS files a Notice of Federal Tax Lien (NFTL) against a taxpayer.
  • Before or after a taxpayer’s property is seized by the IRS.
  • After a taxpayer is denied a request for the discharge of property from a lien.
  • After a taxpayer is denied the subordination of a lien.
  • After a taxpayer is denied the issuance of a certificate of nonattachment.

Who Can Request an IRS Appeal?

All U.S. taxpayers can request an IRS appeal if they received a letter or notice from the IRS that also includes the Taxpayers Bill of Rights and an explanation of their right to appeal the IRS decision.

You can also request an appeal if you disagree with any IRS decision or have not signed a tax settlement agreement with the IRS.

An IRS appeal may not be allowed in the following cases:

  • The IRS sent a balance due notice without mentioning the taxpayer can appeal the amount due.
  • The taxpayer failed to provide all necessary information to support the reason(s) for appealing.
  • The taxpayer wants to appeal due to financial hardship. Unless a taxpayer disputes the tax debt amount, the IRS will not approve an appeal simply because a taxpayer cannot afford to pay.

What are the Steps for the IRS Appeal Process?

First, taxpayers can ask for an appeal by mailing a formal letter to the address found on the IRS letter containing information about a taxpayer’s rights to an appeal.

Include the following in an appeal request:

  • Personal information (name, address, phone).
  • Copy of the letter or notice showing the changes or decisions made by the IRS you disagree with.
  • Tax years for the appeal.
  • List of changes or decisions that you disagree with and the reasons why you disagree.
  • Documents and records that support your appeal.
  • You can find more information about how to prepare an appeal letter in IRS Publication 5 at irs.gov/pub/irs-pdf/p5.pdf.

Next, an officer will do an informal review with the taxpayer to gather more information and discuss applicable tax laws. This initial appeal interview can be done either in person, over the phone, or by video conference.

Last, the officer will decide whether to approve an appeal based on the taxpayer’s interview, IRS collections information, relevant tax documents, and the related tax laws.

How Long Does It Take for an IRS Appeals Decision?

How long the IRS Office of Appeals takes to reach a decision depends on many factors, including whether a taxpayer sends new documents/information after the appeal review starts. So, there is not a specific timeline. However, the review process often starts within 45 days of Appeals receiving an appeal request letter.

If more than 120 days pass without a decision, contact the IRS examination/collection office you started your appeal with. If that office forwarded your request to Appeals, call 855-865-3401 to get the status of your appeal request.

What are the Possible Outcomes of an IRS Appeal?

There are three possible outcomes of an IRS appeal:

  • The appeal is approved.
  • The appeal is rejected.
  • A compromise settlement where the Appeals officer recommends the taxpayer pay only some of the balance due.

Keep in mind that a denial of an IRS appeal can increase tax liabilities in some cases, because the IRS will re-examine tax forms and potentially discover more errors. Also, interest and penalties continue accruing on unpaid tax debts throughout the appeals process.

Need more help? You can start online by answering 6 simple questions. We never charge for ‘investigations’ or consultations. You can also call us at 866-568-4593.

START FOR FREE

6 Simple Questions. Free Evaluation.

Join our Newsletter

Enter your email address to join our free newsletter. Get all the latest news and updates.