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If You Don't Agree With Your IRS Exam Result

 

Option #1 - Do Nothing

For Income, Estate, Gift, And Certain Excise Taxes Or Penalties

If you decide to do nothing and your case involves an examination of your income, estate, gift, and certain excise taxes or penalties, you will receive a formal Notice of Deficiency. The Notice of Deficiency allows you to go to the Tax Court and tells you the procedure to follow. If you do not go to the Tax Court, the IRS will send you a bill for the amount due.

For Trust Fund Recovery Penalty, And Certain Employment Tax Liability

If you decide to do nothing and your case involves a trust fund recovery penalty, or certain employment tax liabilities, the IRS will send you a bill for the penalty. If you do not appeal a denial of an offer in compromise or a denial of a penalty abatement, the IRS will continue collection action. If you don't agree, we urge you to appeal your case to the Appeals Office of IRS. The Office of Appeals can settle most differences without expensive and time-consuming court trials.

 

Option #2 - Appeal

If you don't agree with any or all of the IRS findings given you by the examiner, you may request a meeting or a telephone conference with the supervisor of the person who issued the findings. This conference request must be made within a reasonable period of time, not to exceed 30 days. If you wish to appeal to a IRS agent's supervisor regarding the seizure of house, car, or other property in order to sell your interest in the property to apply the proceeds to your tax debt, you must make the request within 10 days after Notice of Seizure is given to you or left at your home or business. There is no deadline to request a manager conference when a levy is served for other types of property (such as wages or bank accounts) or a levy or seizure or Notice of Federal Tax Lien filing is proposed. The collection action may go forward if a conference is not requested within a reasonable time period.

If there is no agreement at the closing conference with the examiner or the examiner's manager, you have 30 days to appeal to the Appeals Office of the IRS. If you do not appeal within 30 days, the IRS issues a statutory notice of deficiency, which gives you 90 days to file a petition to the Tax Court.

Appeals Office Of The IRS

Appeals go to the administrative appeals office for the IRS. You may appeal most IRS decisions with your local Appeals Office. The Appeals Office of the IRS generally handles appeals arising from audits conducted by the IRS examination function, but it also handles appeals of collection actions (i.e., liens, levies, seizures, or denial of installment agreements), refund claims, collection due process hearings, offers in compromise, and interest abatement claims. The Appeals Office is separate from - and independent of - the IRS Office taking the action you disagree with. Appeals will not engage in communication with employees of other IRS functions (commonly referred to as ex parte communication) to the extent such communication appears to compromise our independence. The Appeals Office is the only level of administrative appeal within the IRS. Conferences with Appeals Office personnel are held in an informal manner by correspondence, by telephone or at a personal conference.

Under the Collections Appeals Program, if you disagree with an IRS employee's decision regarding any levy, seizure, or Notice of Federal Tax Lien filing and want to appeal it, you can ask to have a conference with the employee's manager. If we seize your house, car, or other property in order to sell your interest in the property to apply the proceeds to your tax debt, you must make the request within 10 business days after the Notice of Seizure is given to you or left at your home or business. There is no deadline to request a manager conference when a levy is served for other types of property (such as wages or bank accounts) or a levy or seizure or Notice of Federal Tax Lien filing is proposed. The collection action may go forward if a conference is not requested within a reasonable time period.

Representation

There is no need for you to have representation for an Appeals conference, but if you choose to have a representative, you may have an attorney, certified public accountant, or an individual enrolled to practice before the IRS (i.e. Enrolled Agent) represent you. Your representative must be qualified to practice before the IRS (called Circular 230 qualified). If you want your representative to appear without you, you must provide a properly completed power of attorney to the IRS before the representative can receive or inspect confidential information. Form 2848, Power of Attorney and Declaration of Representative, or any other properly written power of attorney or authorization may be used for this purpose. You may also bring another person(s) with you to support your position, though not in a representative capacity.

Appeals Conference

If you want an Appeals conference, follow the instructions in the IRS letter to you. Your request will be sent to the Appeals Office to arrange a conference at a convenient time and place. You or your representative should prepare to discuss all issues you don't agree with at the conference. An appeals officer or settlement officer will review the strengths and weaknesses of the respective positions taken in your case and give them a fresh look. Appeals will consider reasons you have for disagreeing with the IRS that are based in tax law and regulation and will not consider reasons based on moral, religious, political, constitutional, conscientious objection, or similar grounds. If you provide significant new information on a major issue to Appeals, the appeals officer generally ask the IRS examiner who referred your case to Appeals to review the new information and provide his or her analysis and opinion in writing. The IRS examiner's opinion will be shared with you and you will have an opportunity to provide your feedback. If Appeals needs a further clarification from the IRS examiner, the appeals officer will contact you to participate in a conference call if the clarification addresses the substance of the issues in your case.

Most differences are settled at this level. In most instances, you may be eligible to take your case to court if you don't reach an agreement at your Appeals conference, or if you don't want to appeal your case to the IRS Office of Appeals.

Protest

When you request an appeals conference, you may also need to file a formal written protest or a small case request with the office named in our letter to you. Also, see the special appeal request procedures in Publication 1660, Collection Appeal Rights, if you disagree with lien, levy, seizure, or denial or termination of an installment agreement. You need to file a written protest:

  • In all employee plan and exempt organization cases without regard to the dollar amount at issue.
  • In all partnership and S corporation cases without regard to the dollar amount at issue.
  • In all other cases, unless you qualify for the small case request procedure, or other special appeal procedures such as requesting Appeals consideration of liens, levies, seizures, or installment agreements. See Publication 1660.

You must sign the written protest, stating that it is true, under the penalties of perjury as follows: “Under the penalties of perjury, I declare that I examined the facts stated in this protest, including any accompanying documents, and, to the best of my knowledge and belief, they are true, correct, and complete.”

Small Case Request Procedure

If the total amount for any tax period is not more than $25,000, you may make a small case request instead of filing a formal written protest. In computing the total amount, include a proposed increase or decrease in tax (including penalties), or claimed refund. For an offer in compromise, in calculating the total amount, include total unpaid tax, penalty and interest due. For a small case request, follow the instructions in our letter to you by: sending a letter requesting Appeals consideration, indicating the changes you don't agree with, and the reasons why you don't agree. 

The Starling-Flock Law Office Is Here for You

At the Starling-Flock Law Office, we focus on Federal Tax Services and Federal Tax Representation and we are here to listen to you and help you navigate the legal system.

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The Starling-Flock Law Office is committed to answering your questions about Federal Tax Services and Federal Tax Representation law issues in all 50 states.

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