Taxpayer’s Guide to IRS Tax Appeals
IRS Tax Appeals: How and When to Appeal IRS Tax Assessments and Collection Actions
If you disagree with an IRS decision, you can appeal. Generally, you can only appeal if the IRS sends you a letter stating you have the right to appeal. This guide explains when you should consider filing an appeal.
To get help with an IRS appeal, contact us at The W Tax Group today. Our tax attorneys have extensive experience filing IRS appeals, and we can handle the process for you.
When Should You Consider Filing an Appeal With the IRS?
IRS appeals can be filed for a variety of reasons. Some common reasons include:
- Not agreeing with the IRS about the amount of taxes you owe.
- Not agreeing with the IRS about the outcome of an audit.
- Not agreeing with the IRS about a penalty that has been assessed.
- Not agreeing with the IRS about a collection action that has been taken.
If you find yourself in any of the above situations, you may want to consider filing an appeal with the IRS. The appeals process can be confusing and daunting, but luckily, there are IRS representatives who can help guide you through it.
When Is an Appeal Not the Right Decision?
There are also certain situations where filing an appeal is not the best option. For example, if you’ve already signed an agreement with the IRS that outlines a payment plan for your taxes owed, you likely won’t be able to file an appeal.
There are some cases where the IRS may automatically deny your request for an appeal. This can happen if you don’t file your request within the required timeframe or if you haven’t attempted to work out your issue with the IRS agent assigned to your case. The IRS also will not consider an appeal if you didn’t provide the requested information during an audit.
Additionally, if the last letter you received from the IRS didn’t mention your right to an appeal, you may not be able to file an appeal. If you’re not sure whether or not filing an appeal is the right move for your situation, you can always consult with a tax professional. They will be able to help you understand your options and identify the best course of action for your unique situation.
How to Appeal an IRS Collection Decision
IRS appeals can also be filed for collection decisions made by the IRS. If you’re considering appealing a collection decision made by the IRS, you first need to submit a written protest to the address on the letter that outlined your appeal rights. At that point, you will try to work out the issue with the IRS office that initiated the collection action.
If they can’t resolve the issue, they will send your case to the IRS Independent Office of Appeals. You’ll then have the opportunity to present your case and explain why you believe the IRS’s collection decision is incorrect. You can represent yourself, but for best results, you should have a tax attorney, an enrolled agent, or a CPA represent you. Here is an overview of the different types of IRS appeals.
Collection Appeals Program
You can use the Collection Appeals Program (CAP) to appeal a variety of collection actions, including the following:
- Federal Tax Liens
- Asset seizures
- Rejection of requests to return levied property
- Installment Agreement rejections, terminations, and modifications
To start the process, call the number on your notice or contact the revenue officer assigned to your case. Make sure you have all the documents and details to support your case. You will also need to talk with a collection manager and submit Form 9423 (Collection Appeal Request).
Collection Due Process (CDP) Hearings
The IRS Collection Due Process (CDP) is a process that allows taxpayers to challenge IRS collection actions. This includes decisions about levies, seizures, and liens. If you have the right to request a CDP hearing, the IRS will send you a notice outlining your rights.
During the CDP hearing, you’ll have the opportunity to present your case and explain why you believe the IRS’s collection action is incorrect. The IRS officer will then make a determination about your case.
You must request the CDP hearing within 30 days of receiving the notice. If you make the request on time, the IRS will stop the levy action until the appeals process has been completed, and if you disagree with the results of the CPD hearing, you can request a judicial review from the Tax Court.
If you miss the 30-day deadline, you have a year to request a CDP Equivalent Hearing. If you make the request within this time frame, the IRS won’t stop the levy action, and you will not have the right to request a judicial review. You can request a CPD hearing by filing Form 12153 (Request for a Collection Due Process or Equivalent Hearing).
Appealing a Rejected Offer in Compromise
If you’ve submitted an Offer in Compromise (OIC) to the IRS and it has been rejected, you have the right to appeal the decision. To start the appeals process, you’ll need to file Form 13711 (Request for Appeal of Offer in Compromise). This form must be filed within 30 days of the date you received the IRS’s rejection notice.
Appealing a Trust Fund Recovery Penalty
The IRS Trust Fund Recovery Penalty (TFRP) is a penalty that can be assessed against business owners or other individuals who are responsible for paying payroll taxes on behalf of a business. If you’ve been assessed the TFRP, you have the right to appeal the decision.
To appeal, you need to send a written protest to the address on Letter 1153 (Proposed Trust Fund Recovery Penalty Notification) as well as a copy of the letter. In your protest, explain why you are not responsible for the TFRP or why you disagree with the amount of the TFRP.
Appealing a Tax Levy
If the IRS has issued a levy against your property, you have the right to appeal the decision. To start the appeals process, you’ll need to file a Form 12153 (Request for a Collection Due Process or Equivalent Hearing) or work through the steps for the Collection Appeals Program.
Once your form is received, it will be assigned to an IRS appeals officer. You’ll then have the opportunity to present your case and explain why you believe the IRS should not issue a levy. The appeals officer will make a determination about your case. If you’re not satisfied with their decision, you can usually request a review.
If the IRS has filed a tax lien against your property, you also have the right to appeal the decision. Again, to start the appeals process, you can use the Collection Appeals Program or file a Form 12153 (Request for a Collection Due Process or Equivalent Hearing).
What Is an IRS Protest?
To start the appeals process, you must send a written protest to the IRS. IRS protests are generally filed by businesses or individual taxpayers who disagree with an IRS decision made on their taxes. The IRS has a specific process for handling protests, and it’s important that you follow the steps carefully in order to have your protest heard.
The first step in filing a protest is to send a letter to the IRS explaining why you disagree with the IRS’s decision. Generally, this letter must be sent within 30 days of the date you received notice of the IRS decision. The deadline will be noted in your letter.
Draft your protest carefully and be detailed. The IRS appeals employee will use your protest letter to prepare for your appeals case. If the tax and penalties being appealed are less than $25,000, you can make a small case request instead of a formal written protest. For a small case request, just write a short statement about the issue and why you disagree. Otherwise, complete the appeal request form that came with your notice or file Form 12203 (Request for Appeals Review).
If you owe more than $25,000 for any of the tax periods you’re trying to appeal, you must submit a formal written protest. Partnerships, S-corps, and cases involving employee plans and exempt organizations must always file a formal written protest, regardless of the amount in dispute. The formal written protest should include your contact info, the disputed issues, the reason you disagree, and the facts and laws that support your case.
Get Help with IRS Appeals
Keep in mind that the entire IRS appeals process can take several months, so it’s important to be patient. The process can also be confusing and hard to navigate on your own. There’s a lot at stake and to get the best outcome, you should work with a tax professional.
The tax attorneys at The W Tax Group can help you file an appeal and negotiate with the IRS. You don’t have to deal with the IRS on your own. We can help you get relief from your tax issues. To get help, contact us today for a no-cost consultation.