The Who, What and Why of A Tax Appeal

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A Tax Appeal is a common way to resolve disagreements that you may have with the IRS relating to items you reported on your tax return. If you’re considering an Appeal as an option to resolve your tax issue, there are procedures you MUST follow to insure your right to an appeal. You have the right to appeal almost any decision that an IRS agent makes regarding your taxes including the following:

  • Rejected Offer in Compromise
  • Notices to Levy your Property, Wages, Accounts and/or Real Estate
  • Decisions that the IRS Officer made about your ability to repay your taxes
  • IRS Denial of Penalty Relief
  • Terminated or denied Installment Agreements

And the list goes on…
Depending on your situation, an appeal may provide the best result and it’s VERY important for you to take the right steps to execute it properly.

So why might an appeal make better sense?

For starters, someone new to the case may provide a more objective mindset in reviewing your case.
Occasionally, you or your representative may experience a certain IRS employee or manager who is unwilling to consider a different point of view. The reality is that this employee or manager may be limited on the types of decisions they can make based on their level of authority within the IRS. In this situation, having an impartial and objective person to review the case can be beneficial to you.

Another factor is, Appeals considers the “Hazards of Litigation”
Representing a case within a courtroom is much more costly than settling out of court. Not only is it costly in terms of the time and resources required to prepare the case, but the IRS takes a risk because the court may not uphold their position. For this reason, Appeals has more authority to settle a case and, in general, Appeals Agents are higher ranked employees who have more knowledge about the laws and policies impacting you. According to the Internal Revenue Manual (IRM), Appeals’ mission is:

“to resolve tax controversies, without litigation, on a basis which is fair and impartial to both the Government and the taxpayer in a manner that will enhance voluntary compliance and public confidence in the integrity and efficiency of the Service.”

It is important that a Tax Practitioner prepare a well-organized case to take to Appeals. All cases, no matter the size, should include:

  • A letter clearly stating that you  intend to challenge the IRS’s findings in Appeals and the specific tax years involved;
  • A copy of the letter or notice from the IRS or issuing entity which shows the proposed changes;
  • The specific changes that you  do not agree with and why you do not agree;
  • The specific law(s) or authority which support your position,
  • A statement signed by you under penalties of perjury.

A properly executed appeal lays out the details of the issue in chronological order and explains the legal argument for each issue. A strong resource for the practitioner is the IRM which should be utilized in every case. When a Practitioner presents an organized, clearly detailed case outlining the authorities and laws that he or she is relying on, the Appeals officer’s job becomes much easier which, generally, makes it more likely that a decision will be made in your favor.

Once an Appeals officer is assigned and he or she has reviewed all documents pertinent to your case, he or she will schedule a conference with you and/or your representative.  Usually, conferences are informal and can be handled over the phone, in person or even by mail.  Each side will present their argument and most differences will be settled at this point.

Utilizing an Enrolled Agent or other practitioner who is skilled at presenting Appeals cases can be of great benefit to you.

Just to recap, who can Appeal? You can appeal. What can you Appeal? Almost any decision that an IRS Agent has made regarding your taxes. Why might you want to Appeal? A few factors include: someone new to review the case, and consideration of Hazards of Litigation.

Have you ever had an experience with Appeals? If so, let us know in the comments below. Don’t forget to share this post with your friends and family. And remember; we, at Hayes Financial, have a lot of experience and success in representing cases in Appeals. If you or someone you know finds themselves in a difficult tax situation call us at 704-298-1040. We are the experts at helping you take your life back from the IRS.

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