Getting a tax decision from the IRS that you disagree with can be frustrating. Fortunately, you have the right to challenge it through an appeal. Understanding the process helps you take the right steps and increases your chances of a favorable outcome.
Review the IRS notice carefully
Before filing an appeal, read the IRS notice thoroughly. It will explain the decision, the amount in question, and any deadlines. The IRS usually allows 30 days to respond, so act quickly. Identify the specific reason you disagree and gather supporting documents, such as tax returns, receipts, or legal tax codes.
Request a conference with the IRS
If you believe the issue can be resolved informally, you can contact the IRS directly. Sometimes, mistakes happen, and a simple conversation can fix the problem. If that doesn’t work, you can request a conference with the IRS Office of Appeals. This office operates separately from the IRS enforcement divisions, giving you a fair chance to present your case.
Submit a formal written protest
For disputes involving more than $25,000, you must submit a formal written protest. This letter should include your name, contact information, tax year in question, the disputed amount, and a detailed explanation of why you disagree. Attach any supporting evidence to strengthen your case. If the amount is less, a small case request may be an option, which is a simpler process.
Prepare for an appeal hearing
Once you file your appeal, the IRS Independent Office of Appeals will schedule your hearing. This can be done over the phone, through correspondence, or in person. Be ready to present your argument clearly and support it with facts. The appeals officer will review the case and make a decision based on the evidence.
Weigh your next steps
If the appeals office agrees with you, the IRS will adjust your tax liability. If not, you may still have options, such as taking the case to the U.S. Tax Court. Understanding your rights and acting quickly can help you resolve disputes more effectively and minimize the financial impact of an unfavorable IRS decision.