How and When to Appeal IRS Tax Assessments and Collection Actions
Do you disagree with the IRS (Internal Revenue Service) regarding an item you reported on your return? Don’t just sit back and wallow in misery—an appeal is the best course of action.
But factually, you can only appeal if the IRS sends you a letter confirming your right to do so. You also need a valid argument to follow that route, lest you’ll be wasting your time.
If you’re seriously considering an IRS appeal, arm yourself with critical information about the process to retain that right and do what’s necessary to guarantee your request’s validity.
This article provides handy details about IRS tax appeals, including when to initiate the process and how to go about it.
When to File an IRS Appeal
You should file an appeal with the IRS if:
- The revenue service failed to properly apply a law governing one of the items you reported on your returns
- It used incorrect facts to make a decision relating to a collection action, penalties, or rejected offers
- It misinterpreted a law, leading to an unfair or wrong decision
No matter your reason for filing an IRS appeal, seek factual information and evidence to back your position. If you’re unsure about your resolve, consult a qualified tax expert to assess your case and tell you whether an appeal is worth it, based on your situation.
You must also confirm that your tax issue is eligible for re-examination before initiating an IRS tax appeal. This means it should be related to the following:
- Tax liens
- Levies
- Audits
- Asset seizures
- Requests for penalty removal or reduction
- Installment payment agreement, termination, and adjustments
- Offers in Compromise
- Innocent Spouse Determination
How to Appeal an IRS Decision
If your tax problem is eligible for an IRS re-examination, and the revenue service has verified your right to take that step, you can initiate the appeal process. The first step to doing that is drafting a written protest to request a Appeals conference.
What is a Written Protest?
A written protest is a formal document that describes your dispute with the IRS. It must contain the following details:
- Your name, current address, and telephone number
- An affirmative statement to confirm you intend to dispute the IRS findings
- A copy of the notice or letter the IRS sent you approving your right to appeal
- The correct tax periods or years
- All the items you disagree with
- Your reasons for disputing the IRS decision
- Facts, laws, and evidence indicating why your appeal is valid
- The penalty of perjury statement—”Under the penalties of perjury, I declare that I have examined the statement of facts presented in this protest and in any accompanying schedules and statements and, to the best of my knowledge and belief, they are true, correct, and complete.”
- Your signature
Note that if the amount you plan to appeal is $25,000 or less, you don’t have to hand in a written protest; a Small Case request will do. It’s a brief statement asking for an Appeals conference to discuss your issue with the IRS and propose the changes you want to be made.
However, a written protest is your only option if you’re appealing more than $25,000. And you must send it to the IRS within 30 days of receiving the revenue service’s notice about its decision.
Tips for Drafting an Effective Written Protest
A perfectly-crafted written protest can help your case when presenting your issue to the Appeals officer. These three powerful strategies can help you write yours correctly to boost your chances of success when filing an appeal with the IRS.
- Take Advantage of Legal Authority
An excellent written protest presents a strong case that convinces the Appeals officer to settle because the chances of the IRS winning at Tax Court are slim. Use legal authority to elaborate on the potential consequences of litigation and how they can negatively impact the revenue service. You can quote laws, and provide IRS publications to back your arguments, even if you deem them weak.
- Use a Facts-Only Approach
Writing a fact-oriented written protest is critical if you hope to settle your case with the IRS. You should provide valid documents to show the Appeals officer that you did your homework before beginning the appeal process.
Besides boosting your confidence, it also gives you a much-needed psychological advantage over the person helping you settle your case with the revenue service.
Using facts to support your arguments also gives you credibility, which is essential if you want to solve your tax problem at the Appeals stage.
- Go into Details
At the Appeals level, you have one job—to prove that the IRS made a mistake. Therefore, describe each of your arguments thoroughly when crafting your written protest. This gives the Appeals officer all the information they need to make a decision that favors you when the Appeals conference is held.
The Appeals Conference
After you send your written protest, an impartial Appeals officer examines your case objectively and schedules an informal conference to discuss your issue with the IRS. The meeting can be done in person or by phone.
Most taxpayers attend the Appeals conference alone. But if you’d like to involve an expert, bring a qualified tax attorney or other representatives recognized by the IRS, such as a certified public accountant (CPA). They can help to negotiate a favorable settlement and save you the hassle of going to trial.
Be sure to provide the required paperwork at the meeting. And don’t introduce any new information or documentation since the Appeals officer has to go through it carefully, which requires more time.
Most IRS appeals are settled during the Appeals conference. Typically, you’ll receive a response from your IRS agent after between 90-120 days, but they may take longer to work on your case based on factors such as:
- The nature and complexity of your dispute with the IRS
- The evidence you provide to support your case
- The legal theories involved in your issue
- The Appeal’s decision on the potential hazards of litigation
- The availability of legal authority
Sometimes, the results of the Appeals conference might not favor you if the IRS officer agrees with the revenue service. Supposing you aren’t willing to give up, you can challenge the IRS in U.S. Tax Court.
The Collection Appeals Program (CAP)
The CAP can also be handy when appealing different IRS collection actions, such as levies and federal tax liens. If you choose to appeal using this method, you must get Form 9423, a document that requires you to fill in various details, which include but aren’t limited to the following:
- Your name
- Phone number
- Physical address
- Social security number
- Amount of tax due
- Specific tax period
- The action you’re appealing
Once you complete filling in Form 9423, mail it to the right office to avoid unnecessary delays.
Also, bear in mind that the deadlines for appealing collection actions vary.
For example, if you’re appealing the seizure of your property, you must get in touch with your collection officer within 10 days of receiving the notice.
Those leveraging CAP to dispute modifications of installment agreements have 30 days to file their appeals.
When is an IRS Appeal Not an Option?
Although filing an appeal with IRS is an effective method to solve tax disputes, it’s not ideal for everyone.
For starters, you shouldn’t appeal an IRS decision if the revenue service’s notice didn’t mention that you’re eligible.
There are various reasons the service may decline your request for an appeal. For instance, if you send your written protest after the 30-day period or stipulated deadline has passed, the IRS agent working on your case may fail to consider your issue.
Also, an appeal isn’t suitable if you lack adequate information to support your argument. Remember, your success largely depends on your capability to persuade the Appeals officer to settle in your favor. The examiner might not take you seriously without facts to back your position.
In addition, you don’t qualify for an appeal if you’ve already agreed to pay the IRS what you owe, even if you disagree with the amount. In such cases, the service requires you to sign an agreement stating the same to show your commitment.
Appealing an IRS tax assessment is also not advisable if your main issue is you can’t pay what you owe due to financial constraints. A situation like that requires you to request an Installment Agreement to allow you to pay the amount in installments.
We’re in Your Corner
If you lack legal expertise or help, the IRS tax appeal process can be one never-ending nightmare. You could spend months bouncing between one office and another trying to solve your tax problem. Thankfully, you can enjoy a much smoother experience by getting the right professionals on your team.
At Cumberland Law Group, we have savvy, reputable tax attorneys ready to put your interests first. We can guide you through the IRS tax appeal procedure and increase your chances of success so you can do away with your tax issue as soon as possible.
Ready to get started? Call us at (678) 539-0591 for a free consultation today.