IRS Dispute Resolution: Why You Need To Know Your Rights

If you are seeking IRS dispute resolution, you can do so through the IRS Office of Appeals without necessarily having to go to court, which can be costly and time-consuming. The IRS Appeals Office was created to decongest many disputed tax cases. Also, to lower the number of cases that go to trial and to resolve the disputes sooner, the IRS has doubled their efforts to improve the resolution process. But how do you know if you should appeal an IRS decision about taxes and what are your taxpayer rights? Our article covers some of the most asked IRS dispute resolution questions, also known as Alternative Dispute Resolution (ADR).

IRS Dispute Resolution

What Is A Tax Appeal?

A tax appeal is a common way to dispute and resolve your disagreements with the IRS.  As mentioned above, these disputes are filed with the IRS Office of Appeals. However, there are some distinctions as to what can or cannot be disputed.

Who Should Appeal A Decision?

You should appeal an IRS decision if, among other things, you have already worked your case with the IRS and received a letter from them describing your rights to appeal, if you don’t agree with the IRS’s decision and have not signed the agreement form sent to you. If you do not meet the above-described requirements, you may be ready to request an appeal. However, the IRS appeals process may not be right for you if you received correspondence from the IRS unrelated to appeals, if you intend to raise frivolous claims, or if you missed the deadline to request an appeal.

How Does The Office Of Appeals Work?

After you file a tax appeal with the IRS, a date for your case is set. Your tax professional in Miami or Broward can help your case run smoothly by taking the proper steps. You must file your IRS claim before filing an appeal. When you do not follow the proper steps, your case may be dismissed because you did not make good use of the IRS administrative remedies.

Some of the things that can be disputed include liens, levies, seizures, offers in compromise, installment payment plans, requests for penalty relief or removal, innocent spouse decision, and audits/examination determinations. That is why it is important you learn about the tax code with the help of a tax preparer in Miami or Broward. It makes things easier and these professionals can answer any questions you may have regarding your IRS tax dispute eligibility.

Prepare A Request For IRS Tax Appeal

The best approach to starting the IRS tax appeal process is to look for a skilled tax professional that could do the proper research for your specific situation and submit a formal IRS protest letter on your behalf stating your disagreement with the IRS determination and giving the reasons that support your position. A formal written IRS protest letter is required notwithstanding the case.  You have the option to represent yourself or have someone representing you.

The written protest will include your personal contact information, an affirmative statement of your request to appeal, a copy of your IRS notification, the applicable tax years that triggered the IRS dispute as well as statements of law and fact that back up your tax return situation.  

When the amount disputed is $25,000 or less, an informal small case can be submitted, which will lessen your tax requirement to submit a formal protest. However, statements that support your tax position are still necessary.

Avoid Tax Court

It is better if you stay out of federal court. Remember, the IRS prefers to prevent disputes from escalating to federal court when possible. Going to court can cost them more and cost you as well.  Also, appeal officers prefer a cost-effective mitigation process. In other words, it is best to reach an agreement and try settling out of court.

Developing A Good Protest

The best approach to get what you wish for is making the IRS appeal officer’s job a bit easier. Make sure you present the facts in chronological order and the reason for each fact is explained thoroughly.  Your case should include the following:

  • The tax period as well as years involved.
  • Explain clearly why these findings have been challenged.
  • Which laws support your claim or position.
  • Sign/notarize your statement.
  • Letter showing the suggested changes.

If the practitioner can prove that the IRS employee handling the case had made an error by not following the established protocols or violating the taxpayer rights, then the IRS dispute process will be a success.

After The Appeal Process Is Finished

After the tax appeal process has been completed, a closing agreement is prepared by the appeals officer IRS, which is the terms by which the IRS will settle the tax appeal. There is no longer room for negotiation moving forward.   In other words, you will either accept or reject the IRS terms. If you agree to the terms, then the case will end at that point.

However, if the taxpayer believes the terms of the agreement are unreasonable, there is a short window of time for the case to be appealed to a higher tax court. Once Again, make sure to exhaust all administrative remedies before an official IRS appeal is filed. The best approach is hiring a tax professional with the IRS dispute resolution experience.  

Resolve Your Tax Dispute

The IRS tax appeal process may take several months but it is worth trying as you may accomplish substantial savings on your tax bill.

My CPA, PA is prepared to handle your tax dispute with the IRS. We understand the unique attention your case deserves, so our qualified team of CPAs and licensed tax professionals is here to assist you. Contact us at your convenience and we will take it from there.

Legal Disclaimer

Information Only / No Legal Advice Intended

This publication is designed to provide general information regarding the subject matter covered. It is not intended to serve as legal, tax, or other financial advice related to individual situations. Because each individual’s legal, tax, and financial situation is different, specific advice should be tailored to the particular circumstances. For this reason, you are advised to consult with your own attorney, CPA, and/or another advisor regarding your specific situation.

To ensure compliance with requirements imposed by the IRS, we inform you that any US federal tax advice contained in this communication (including any attachments) is not intended or written to be used, and it cannot be used for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing, or recommending to another party any transaction or matter addressed herein. Always seek advice based on your particular circumstances from an independent advisor. Any disclosure, copying, or distribution of this material, or the taking of any action based on it, is strictly prohibited.


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