A good tax attorney knows how to help clients through appeal procedures.
IRS Audit Appeal Process: How to Appeal IRS Audit Findings
IRS Audit reports terrify conservative taxpayers as the procedures involve spine-chilling visits from the revenue enrolled agents. But taxpayers with unfavorable adjustment rulings can present their case at the IRS audit appeal office for settlements. Furthermore, the Internal Revenue Service avoids extensive litigation due to unfortunate results, expenses, and time, and taxpayers can benefit.
Taxpayers can disagree with the IRS audit findings and fight the case to win without using IRS tax resolution services. So, did you receive unfavorable adjustment rulings and seek to file and win an appeal? In this article, we will discuss how you can fight the IRS and win with the appeal procedures.
IRS audit appeal: how to fight the IRS and win
What do I do if I disagree with the IRS audit results? Well, many taxpayers fight the IRS audit findings by filing and winning an appeal with a tax attorney. But taxpayers must follow the rules to avoid complications with the Internal Revenue Service, especially when dealing with debt resolution or delinquent taxes. Let's dive into how to fight IRS audit findings to improve your knowledge.
1. Choose your battles
Before engaging the IRS in a tax audit battle, take a comprehensive look at the advantages and disadvantages. The procedures are essential, so consider the cost of hiring a tax attorney or expert, and check your records and confidence level before embarking on this journey.
Battling the Internal Revenue Service is a daunting task, so ensure your records are intact and up-to date before filing for an appeal. Consider what difference winning or losing the battle against the Internal Revenue Service will make in the short and long term before proceeding with the request.
Next, evaluate how much money is at stake to determine if your gains are worth the process. You can get into the ring with Internal Revenue Service agents after confirming the availability and status of your records.
2. Seek advocacy for the appeals process
If you’re a tax lien or have a dispute IRS tax debt, consider seeking advocacy to understand your rights. Consider visiting the IRS collection website for professional advocates' email addresses or contact information to book an appointment, even for a small case request.
Furthermore, you can visit the IRS Taxpayers Advocate Office to seek professional help in understanding and voicing your opinions and rights. The IRS Taxpayers Advocate Office is an independent unit that offers valuable insights and advice to solve your problems.
Keep in mind that these professionals can offer comprehensive advice that may solve your tax problems, but they play by the rules and cannot make decisions. If your tax case is high profile, consider hiring a tax attorney. Low income taxpayers can contact the IRS audit and dispute office for immediate help. This unit has certified certified public accountants (CPAS) that can assist and represent qualified low-income taxpayers.
3. Straight to the point
Most taxpayers get an audit report from the Internal Revenue Service with details of money owed to the government. Try to file an appeal within 30 days of receiving this notice from the IRS. Waiting longer or delaying the process could result in unwanted penalties as government authorities can lay claim to your property as debt settlement.
Keep in mind that the IRS unit has a separate division for appeals that evaluate and determine tax decisions. Also consider requesting a hearing after filing for an appeal in this division. Be clear with your objectives when negotiating to resolve tax issues with Internal Revenue Service agents.
Furthermore, stay up-to-date with tax debt resolution plans as you may qualify for a select few. These tax debt resolution plans can help you avoid confusion during negotiations with agents. While many taxpayers represent themselves at the appeal division, hiring a certified public accountant or tax attorney may be your best winning solution.
4. Strictly adhere to submission deadlines
While many taxpayers miss the IRS submission deadlines for tax returns, trying to abide by the rules will play in your favor. Some taxpayers overlook submission delays for different reasons and instead rely upon the IRS grace periods, but waiting can often complicate the situation.
In other words, do not ignore the tax returns submission date and time specified by the Internal Revenue Service commission. The country is home to millions of taxpayers, and the Internal Revenue Service sets these submission rules for a reason.
In turn, time is of the essence as the agents have submission dates and times for the audit process too. The Internal Revenue Service commission places your case in the spotlight for cross-examination and questions to evaluate and determine results after submission.
5. Communicate with the IRS in writing
After receiving the unfavorable adjustment ruling, consider communicating with the Internal Revenue Service in writing. All communication with the commission must be in writing instead of verbal interaction. It will be best to record all written IRS appeal copies to prove your case and that you're not ignoring your tax issues.
These copies will serve as evidence to support your statements when dealing with IRS agents regarding the tax problem. While written communication is the best approach, taxpayers eventually interact with the commission agents.
If you want to speak to revenue agents, consider hiring a certified tax attorney before initiating contact. Keep in mind that you're dealing with the federal government, and you need professionals who fully understand tax law during negotiations.
6. Negotiate with revenue agents
If the debts are overwhelming and you're unable to pay, the Internal Revenue Service commission is flexible and may offer some wiggle room. Consider negotiating with the Internal Revenue Service agents for installment payments.
If your debt is below $10,000, you may qualify for some wiggle room benefits. Negotiate an installment plan with the Internal Revenue Service agents and don't default the payments. Remember that installment agreement comes with interest charges for the agreement duration.
However, if your financial status is bad and you cannot pay the amount of tax debt allocated by the commission, it's time to ask for a compromise. While the commission has reservations for candidates who qualify for a compromise solution, your financial status will determine your fate. The Internal Revenue Service commission looks into payment proposals and considers taxpayers in bad financial shape so that you may be lucky.
7. Ensure IRS agents agree to your settlement
There is an unwritten rule that the IRS will not quickly agree to taxpayers' appeals, but you have a chance with proper records. The commission came into existence to collect full tax payment fees, including fines and penalties. But if you explain your side of the story with a convincing effort, agents may agree to your settlement resolution.
The commission set up an appealing unit for taxpayers who disagree with audit findings to make their point and prove their case. So, consider making a convincing case and prove your point instead of arguing or asking unnecessary questions during debt resolution negotiations.
If you follow the rules with a convincing case, Internal Revenue Service agents may find a settlement and solution to your tax debt problem. Remember that whatever decision the commission makes, you'll have to make a fair compromise.
8. Head to court with a tax attorney
After taking all the above steps without a reasonable solution, it's time to head to court. Hiring IRS tax audit representation such as a certified tax attorney will help a great deal when contesting your case. You may find redress without paying court fees with the tax court's commitment to resolving problematic tax issues.
Tax court can be a drawback for some taxpayers, so visiting a district court may be the best solution. Many district courts listen and judge different cases, but it may come at a fee. Taxpayers may pay for the contested bill before a hearing at a district court.
How long does IRS appeal take?
IRS appeals process time depends on which route you take and the appeal case type after adhering to the specified submission time and date. The collection due process hearings can take 59 days to get to IRS appeals and 252 days to resolve.
The case is different from a regular audit as it takes 105 days to get to IRS appeals and 337 days to resolve. Furthermore, the rules are different for a large case audit. While a large case audit takes 108 days to get to IRS appeals, you may spend 637 days to resolve the case at the office for settlements.
If you're appealing for penalty fines, your case may take 100 days to get to IRS appeals and 220 days to resolve. Finally, if your case is an offer in compromise appeal, it will take 61 days to get to IRS appeals and an additional 240 days to resolve.
How to appeal IRS audit findings
Many taxpayers disagree with the IRS audit findings, so filing for an appeal is the best solution. Fast-tracking settlements and filing an appeal notice within 30 days of receiving the audit letter or statutory notice of deficiency are ways to dispute the IRS tax bill.
Furthermore, appearing before an appeals hearing or considering tax litigations are other ways to appeal IRS audit findings. We'll next discuss how to dispute an IRS tax liability.
Fast Track Settlement
After receiving your IRS audit findings and disagreeing with the results, your first option is to fast-track settlements. It is an option for every taxpayer when filing to dispute the IRS tax bill after an audit.
While the settlement program is relatively new, the government designed it to settle the dispute for taxpayers. So, consider resolving your tax disputes with the IRS accelerated through the settlement program.
The fast-track settlement program enables the IRS to assign an appeal agent or mediator for amicable resolutions and payment plan. If there are no resolutions or friendly solutions to your tax issues after activating the settlement option, you can pursue an appeal.
The 30-Day Letter
If you cannot solve the tax problem with fast-track settlements, it's time to explore the appeal option. The Internal Revenue Service sends an official letter with audit details to taxpayers after concluding findings, and you can appeal the decision. Every taxpayer can explore the appeal option within 30 days of receiving the IRS official audit findings letter.
Should you want to appeal, the Internal Revenue Service assigns you an officer for extensive discussions and negotiations. Your first step is filing for a notice of appeal within 30 days of confirming the IRS letter. Many taxpayers fail to file an appeal within the required period, making the process more difficult. While you can still appeal the audit after missing the 30-Day Letter deadline, the commission may not grant your request.
But if you file for an appeal before the 30-day deadline, consider providing sufficient facts and evidence to support your case. It would be best to have legal analysis and supporting documentation to prove your point in the appeal letter. If you follow the rules and provide the necessary documentation and facts, you might find an amicable solution at the end of the appeal.
The 90-Day Letter
The statutory notice of deficiency, also known as the 90-Day Letter, might be the option to explore if the above options fail. While many taxpayers see the statutory notice of deficiency as a ticket to Tax Court, it is also a precursor to petition filing and tax litigation. After receiving the IRS notice that concludes the audit and determines your debt in taxes, you'll get a notification.
The Internal Revenue Service informs taxpayers of the specific amount to pay and the required time by issuing a 90-day letter. Residents with additional tax debt will receive this letter detailing the total amount to pay for the tax year(s).
Taxpayers that missed the 30-day appeal letter deadline will also get this letter. Furthermore, you can get this letter even after pursuing the appeal process without favorable results. If you explored the fast track settlement and 30-day letter option and disagree with the results, this letter will explain how to dispute the adjustments with the IRS.
How to Respond to a 90-Day Letter
After receiving the IRS 90-Day Letter, your first step is to develop a payment negotiation plan or pay the debt without excuses. But if you disagree with the details of the letter, it's time to head to the tax court. You can file a tax litigation petition against the IRS at this court.
Keep in mind that the Internal Revenue Service adopts a strict approach to resolving disputed audits. After the lengthy drafting procedures, highlighting, and issuing the report, the commission will not disagree lightly. So, consider contacting the auditor's manager and appeal directly.
But if you explore the tax court option, the commission cannot evaluate the deficiency in your document. Many taxpayers pay the deficiency fee to prevent accumulating interests during the tax litigation process. While the deficiency payment stops interests from running, you can file for a refund at the case's end.
The Appeals Conference
If you decide to appeal the Internal Revenue Service Audit findings, appearing before an appeals hearing is necessary. The IRS requires every taxpayer with a dispute to appear before an appeal hearing 60 days after filing. The hearing allows taxpayers to present their case with supporting evidence, receipts, and facts.
The commission assigns an appeal officer to the taxpayer who examines and evaluates the new documentation for facts and figures. Many taxpayers resolve disputes with the Internal Revenue Service using this option involving physical conversation. You can present facts with a thorough explanation to find a resolution.
The officer takes an in-depth look at your document to correct deficiencies and reach an agreement. After reaching an agreement, the Internal Revenue Service agents issue taxpayers the Consent to Proposed Tax Adjustment or Form 870. After filling and signing, the taxpayer will return this form to the IRS office.
Another ideal way to appeal the Internal Revenue Audit findings is tax litigation. The litigation process involves taking steps to resolve tax disputes with the local, state, federal, and foreign authorities. Taxpayers explore this option after missing the appeal deadline or exhausting different appeals processes with undesirable results.
While tax litigation can resolve issues with the Internal Revenue Service, you can file for it after receiving the 90-day letter or Notice of Deficiency. Although many taxpayers resolve their problems with the IRS commission before the trial commences, it remains a viable and reliable option for an amicable solution.
So, if your case goes to trial, you have a better chance because both parties will contend with a judge instead of a Jury. An IRS District Counsel represents the commission when the trial commences, and each party will present its case. Consider exploring this option with proper documentation with facts and figures because the District Counsel will cross-examine your papers.
After both parties present their case with extensive arguments, the judge decides. If your documents are accurate, the judge's decision may be favorable, but there will be penalties if the reverse happens. After making the decision, the judge states your total debts with interests and penalties, ordering payment within a time frame.
Hire a Tax Attorney
While taxpayers have various options to appeal the IRS Audit findings, hiring professional tax experts such as IRS audit lawyers may be the best solution. These tax attorneys are experienced and knowledgeable individuals that can help you navigate and comply with the complex tax codes system.
Furthermore, these professionals can represent you in tax disputes with the IRS and legally take advantage of the numerous exemptions, credits, and deductions. Consider hiring tax attorneys if you want favorable results or the best outcome for your situation with the Internal Revenue Service.
A knowledgeable tax attorney will help you understand the situation, circumstances, and necessary actions to take for favorable results. Presenting evidence, facts, figures, documentation, and records is essential to your case outcome, and an attorney understands the process.
Whether presenting these documents at a tax court or exploring the litigation option, an attorney can explain your documents in an organized fashion. Furthermore, these professionals can quickly introduce necessary strategies to resolve issues in a tax court.
IRS Appeals Process
The IRS audit and appeals process is a practice of requesting a conference with an appeals officer to settle tax disputes. The commission has an appeal system to resolve tax disputes for people without heading to court. But, taxpayers need a formal written protest or file a case against the Internal Revenue Service regarding the audit findings letter for an appeal.
Taxpayers can disagree with audit findings and file an appeal at the IRS Office of Appeals. This office is an independent commission body that investigates, examines, and evaluates taxpayers' documents before resolving. We will discuss the IRS appeal process below to enhance your knowledge.
1. Initiate Your Appeal
Your first task is not signing and returning your copy of the report from the Internal Revenue Service. This action will result in a 30-day letter from the commission detailing various methods to present your case and appeal the audit findings. It will be best to file an appeal within 30 days of receiving this letter from the IRS for a quick resolution.
Furthermore, directly appealing to the auditor's manager can quickly resolve the issue, but there are no extensions for the 30-day deadline. There are rules when filing an appeal against the Internal Revenue Service and below are the required information to launch a formal protest.
Full name and address
While filing an appeal against the commission can reduce your debts, consider filing with your full name and address. Filing an appeal against the commission without a name and address can lead to no response. Besides, the IRS requires your full name and address for easy identification and quick resolution. Furthermore, consider adding your daytime phone numbers to the formal protest for easy contact.
Add a copy of the letter sent to you
Before sending your formal protest to request a conference with the IRS appeals office, get the copy of your tax letter ready. This letter shows the proposed changes in your tax findings, and officers at the office will verify the information. Now add a copy of the letter to your documentation before transferring it to the appeals office.
An appeal statement
Next, consider indicating your interest in appealing the audit findings in an official letter sent to the IRS appeals office. The Internal Revenue Service appeals office may ignore your formal protest if the documentation does not include a statement of intent. The Office of Appeals needs to see your statement of purpose before proceeding with your case.
Indicate the tax period and year involved
After adding your name, address, and statement of intent to your formal request, it's time to include the income tax period and years involved. The office needs this information to verify your claims before setting up a resolution panel. Consider adding this information, so your assigned officer can verify the deficiency and make necessary amends.
List of recommended items
Your tax audit findings may contain points you disagree with, leading to your formal protest. Consider creating a list of these items and include them in your document before sending it to the appeals office. This list will help your assigned officer identify the problem for a quick resolution. Sending a formal protest to the commission without this list can cause delays and prolong the process.
List of reasons for disagreement
After adding a list of recommended items to your documents, consider introducing your reasons for disagreement. While this list helps the appeals officer understand your pain points, it bolsters your points and adds credibility to your document. Add a list of why you disagree and state your position on the matter with facts and evidence.
Support your position with facts
Now that you have a list of recommended items and reasons you disagree, it's time to support your document with facts. Consider supporting your stance on each item with facts and evidence. The appeals office wants to know why you disagree with the evidence, and now is the time to add it. Your points and evidence prove your case beyond reasonable doubts, making them essential.
Document from the law or authority that supports your position
Another essential item necessary for the process is a document from the authority or law supporting your stance on the audit findings. Consider getting a letter from a court of law supporting your position on each discovery with discrepancies. This document indicates your interest in fighting the tax issue, and the commission will take steps to resolve it.
Acknowledge the penalties of perjury statement
Now it's time to acknowledge the perjury statement in the letter sent to the appeals office. This letter is a statement that ensures that your documents are accurate and not falsified. Before acknowledging this statement, all accompanying documents are valid, correct, and complete. The commission does not take falsehood likely, and there are penalties for offenders.
After adding the required information and documents to the appeal request, it's time for your signature. Consider signing in the available space under the penalties of perjury statement to help your cause.
Didn't Get a Response?
Most taxpayers get a response 90 days after filing for an appeal, but it's time to visit the office if the reverse happens. While response time can vary based on the nature of cases, there should be a reply in 120 days. If you do not hear back from the appeals office after 120 days, grab your car keys and visit the IRS appeals division for a status report.
If you cannot get a status report on your case at the office, interact with senior officers. Get to know when the commission will contact you and get a date. If the reverse happens and getting a date becomes a problem, it's time to contact an Appeals Account Resolution Specialist (AARS).
These specialists will provide necessary information on the officer assigned to your case. You'll get the appeals officer's contact information for a quick resolution.
2. Prepare for Your Hearing
The Internal Revenue Service gives taxpayers 60 days to prepare after filing for an appeal. Most taxpayers use this time to fact-check their documents and ensure each piece of information is accurate before proceedings begin. Consider taking this time to prepare your arguments and details to present during the appeal.
Before exceeding the provided 60 days, consider requesting a copy of the auditor's file for adequate preparation. Every taxpayer has rights and entitlements to these documents under federal law so that you can get them.
While you have the right to request these documents, you need to write a letter to your FOIA officer. Consider volunteering to pay for the costs of necessary copies for a quick response.
Now send this letter through certified mail and demand acknowledgment or a return receipt. While acknowledgment can take a month, follow up with additional messages for a quick response. After writing this letter, please send it to your local IRS office indicating the tax date and years in the audit.
Get your papers ready and organized before preparing other statements and receipts to prove your case beyond reasonable doubts. Consider breaking information on spreadsheets so the appeals officer can understand it.
Visual representations can help your cause but interact with experts before introducing it. Also, if you create an individual folder for each item you're contesting, it streamlines the process for your appeals officer.
3. Present Your Case
Tax dispute cases tend to be informal, and the Internal Revenue Service allows taxpayers to record proceedings. While recording the proceedings is optional, you can record them to request for appeals review.
Furthermore, consider creating a thorough outline of things to tell the appeals office and reviewing your points before the proceedings. Remember to clearly articulate your issues and highlight errors in the audit findings when engaging the audit officer.
Hand your documentation to the officer politely and show the appeals officer errors of the auditor in your tax bill. Avoid foul words or badmouthing Internal Revenue Service agents or auditors during proceedings, as it may jeopardize your success.
After making your point, if the officer requests further documents or research time, be polite to ask for additional time to provide it. Consider taking notes during the proceedings and ask the officer to repeat information you cannot hear clearly, especially if you're not recording the process.
4. Negotiate a Settlement
The Internal Revenue Service instructed appeals officers to avert any chance of the commission losing a case in court. So, after presenting your case beyond reasonable doubts, consider asking the officer to wave any penalties.
After assessing and reviewing your case, you may get a waiver if your evidence convinces the officer. But if your intentions are fraudulent, you'll get a fine. Consider paying for a few adjustments levies in good faith, but avoid specifications. If you decide to pay a part of the adjustments levies, it boosts your credibility and improves your chances of success.
When negotiating the adjustments with the appeals officer, negotiate in percentages instead of dollars. Remember that you need top-notch negotiation skills with an appeals officer for productive results. Your negotiation skills will play a significant part in the results.
Appeals officers reach agreements with taxpayers verbally and transcribe them into the Internal Revenue Service Form 870. While the printed form can arrive in your mailbox in a few months, you'll get it when IRS closes your case.
After signing this form, you cannot charge the IRS to a U. S. tax court over the same case again, even if you discover another mistake in the future. So, please read the information on the form repeatedly and understand it before putting pen to paper. If the figures differ from your agreement with the appeals officer, consult a tax professional and prepare to visit the IRS.
Need Help With An IRS Appeal?
Most taxpayers are out of their league when working around Internal Revenue Service audit findings appeal. While anyone can go through the IRS appeal procedures and succeed, you don't need to fight alone.
As a taxpayer, the Taxpayer's Bill of Rights gives you the legal rights to seek information on all tax laws. Knowing about tax law and practicing tax law is very different, however. This is why retaining a tax attorney is probably the best way to appeal an IRS decision. Tax attorneys can plead your side of the case as they know strategies to adopt for different tax appeals.
There has been many a taxpayer who lost their appeal only for lack of quality representation. This is also why setting up a tax action plan with Brotman Law is a wise choice.
The tax professionals at Brotman Law are experienced and committed to helping business owners and individuals resolve their tax problems. We make it our business to save clients time, sleepless nights and a lot of money.
Our Conclusion on IRS audit appeals
Although filing an appeal against the Internal Revenue Service can be looked on unfavorably or as a disastrous course of action in some cases, there is always a chance for success. Taxpayers who pursue an IRS audit reconsideration and achieve favorable results can usually get some deficiencies reversed. But if they receive unfavorable results, taxpayers should also expect to pay fines and penalties.
Remember: consult tax professionals and extensively research the IRS procedures before filing for an appeal. Tax attorneys specialize in appealing IRS audits and resolving tax issues. The IRS website is also home to valuable information to help you understand your appeal rights.