Lewes CPA
officeProgar & Company, P.A.
Certified Public Accounting services for businesses and individuals
Administrative appeals within the IRS (MS Word)
Administrative appeals within the IRS (.pdf)
Administrative appeals within the IRS
Dear Reader:
If you are involved in a dispute with IRS or are currently
undergoing an audit, you should be aware of your rights to appeal
tax determinations within IRS. This approach tends to be less costly
and formal than litigating the matter in court, and often results in
satisfactory resolution of the issues involved.
You can file an appeal with the IRS Office of Appeals (Appeals) in
your region if you disagree with the result of your tax examination.
The appeal can be filed before you file a Tax Court petition, or
even after one is filed (but before litigation). You can also file
an appeal to contest certain penalties, or after rejection of a
refund claim or compromise offer in a collection case. Under special
procedures, you can also appeal a lien, levy, or seizure by IRS, as
well as an IRS rejection of, or attempt to terminate, an installment
arrangement for tax payments.
A taxpayer can request early referral of certain eligible unresolved
issues from IRS's Examination Division to Appeals.
It is also possible to resolve a tax dispute through a mediation
process in limited situations. The tax law requires IRS to prescribe
procedures under which either taxpayers or Appeals can request
nonbinding mediation on any issue that is still unresolved after the
conclusion of either: (1) appeals procedures or (2) unsuccessful
attempts to enter into a closing agreement or a compromise. IRS has
established procedures for requesting mediation of certain issues,
for cases that are already in the Appeals administrative process. If
the parties do not reach an agreement on an issue being mediated,
they may request arbitration for the issue if the issue meets the
requirements for arbitration.
IRS also has “fast track” programs under which certain taxpayers
that are already under examination can get an expedited resolution
of their cases.
Arbitration is generally available for cases in which a limited
number of factual issues remain unresolved following settlement
discussions in Appeals. Arbitration is optional for both the
taxpayer and Appeals. Either the taxpayer or Appeals may submit a
request to arbitrate after consulting with the other party. Neither
party may appeal the decision of the arbitrator or contest the
decision in any judicial proceeding, but the decision by the
arbitrator doesn't bind or otherwise control the parties for tax
years not covered by the arbitration. IRS specifies issues for which
arbitration isn't available. Although no formal appeal procedure
exists for the denial of a request to arbitrate, a taxpayer may
request a conference with the Appeals Team Manager to discuss the
denial. The denial of a request to arbitrate is not subject to
judicial review.
An administrative appeal can also be made by filing an application
with the office of the Taxpayer Advocate. The Taxpayer Advocate or
his designee can issue a Taxpayer Assistance Order based on a
determination that the taxpayer is suffering or is about to suffer a
significant hardship as a result of the way in which the tax laws
are being administered by IRS.
What's important to keep in mind, is that there are procedures that
represent a middle ground between merely giving in to IRS, or waging
a costly all-out war through litigation. Please call if you wish to
discuss these issues further.