IRS Audit Appeal Process: How to Appeal IRS Audit Findings (2024)

A good tax attorney knows how to help clients through appeal procedures.

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.

Tax Litigation

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, circ*mstances, 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 Audit Appeal Process: How to Appeal IRS Audit Findings (2024)

FAQs

How can you appeal an audit finding? ›

Use Form 12203, Request for Appeals ReviewPDF, the form referenced in the letter you received to file your appeal or prepare a brief written statement. List the disagreed item(s) and the reason(s) you disagree with IRS proposed changes from the examination (audit).

Can I appeal an IRS audit decision? ›

Appeals may be the place for you if all the following apply:

You received a letter from the IRS explaining your right to appeal the IRS's decision. You do not agree with the IRS's decision. You are not signing an agreement form sent to you.

What is the success rate of IRS appeals? ›

Proof of this lies in IRS statistics showing 70% of appeals cases are settled.

How to fight an audit? ›

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.

What are the 5 C's of audit finding? ›

As a guide for what details to include in the audit report, use the five “C's” of recording observations: criteria, condition, cause, consequence, and corrective action plans (or recommendations).

What are the two actions taken on the audit findings? ›

The auditee is responsible for follow-up and corrective action on all audit findings. As part of this responsibility, the auditee must prepare a summary schedule of prior audit findings. The auditee must also prepare a corrective action plan for current year audit findings.

How do I write an audit reconsideration letter to the IRS? ›

Your audit reconsideration letter should:
  1. Say that it is an audit reconsideration request.
  2. Identify the taxpayer, the tax period(s), the type of tax (such as income tax), and, if available, the name and contact information for the IRS auditor who previously worked the case.
  3. Explain the circ*mstances for the audit,

How does the IRS appeal process work? ›

Appeals officers review the facts, the law, the taxpayer's comments, and information presented by the taxpayer and IRS exam or collection office before they make a final decision. They will also explain to the taxpayer the reasons for the decision and their options.

How long do IRS appeals take? ›

Appeals Review: The time it takes for the appeals officer to review your case and make a determination can range from several months to over a year, depending on case complexity and the appeals officer's workload.

What are the chances of winning an appeal? ›

Statistically speaking, any appellant faces an uphill battle with less than a 50% chance of success. But, with those odds, why should a client ever appeal? Todd Smith and Jody Sanders answer this question, highlighting why appeals matter even when the odds might not point to success.

Are appeals hard to win? ›

The trial court does not have to prove it was right, but you have to prove there was a mistake. So it is very hard to win an appeal.

What percentage of people win appeals? ›

The chances of winning a criminal appeal in California are low (about 20 percent of appeals are successful).

What not to say to an auditor? ›

10 Things Not to Say in an Audit Report
  • Don't say, “Ma​​​​​nagement should consider . . .” ...
  • Don't us​​e weasel words. ...
  • Use i​ntensifiers sparingly. ...
  • The problem i​​s rarely universal. ...
  • Avoid the bl​​ame game. ...
  • Don't say “m​​anagement failed.” ...
  • 7. “ ...
  • Avoid u​unnecessary technical jargon.

Can you fight an IRS audit? ›

If you disagree with the results, appeal to the appropriate venue. Within 30 days, you can request an appeal with the IRS Office of Appeals. After 30 days, the IRS will send you a letter, called a Statutory Notice of Deficiency. This letter closes the tax audit and allows you to petition the U.S. Tax Court.

What's the worst that can come from an audit? ›

Tax evasion and fraud penalties are some of the worst IRS audit penalties that you can face. The civil fraud penalty is 75% of the understated tax. For instance, if your tax return showed that you owed $10,000 less than you do, you will owe the $10,000 in tax plus a 75% penalty of $7,500.

How do I write an audit reconsideration letter? ›

Your audit reconsideration letter should:
  1. Say that it is an audit reconsideration request.
  2. Identify the taxpayer, the tax period(s), the type of tax (such as income tax), and, if available, the name and contact information for the IRS auditor who previously worked the case.
  3. Explain the circ*mstances for the audit,

How can I reduce my chances of getting audited? ›

You can't always avoid an audit, but thorough records that support your deductions can quickly appease most auditors. Have supporting documentation for any deduction on your tax return, especially those that are significant or subject to special rules, such as rental losses.

Can audit findings be positive? ›

Audit findings can either be a positive finding which can either be classified as conformity or opportunity for improvement or nonconformity or observation.

What happens if you are found guilty in an audit? ›

If you are audited and found guilty of tax evasion or tax avoidance, you may face a fine of up to $100,000 and be guilty of a felony as provided under Section 7201 of the tax code.

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