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How to Work With the IRS Office of Appeals

Audited by the IRS? That’s bad, but it doesn’t have to be the end of the matter. Even if the auditor ruled against you, you can appeal. You will receive a copy of the auditor’s ruling and a letter detailing how to make an appeal. You’ll have to file your appeal in a timely manner, as outlined in the letter. The IRS requires you to include essential information, detailing the reasons you disagree with the ruling.

The IRS is expected to get back to you within 90 days. If not, contact the office to which you sent the appeal. If you still don’t get any satisfaction, you can call an appeals account resolution specialist to get more information about the person who is assigned to your case.

You will need to put all your support together for your case—any bank statements, checks and other documentation. Organize them by the item you’re disputing. A summary spreadsheet detailing each item in question and your reasoning for disputing it, along with references to your support documentation, will be helpful in making your case. Take it seriously, and provide a full dossier for your case.

Appeals hearings tend to be somewhat informal, but prepare an outline of what you want to say to the appeals officer so you don’t forget anything. The officer may ask for additional information from you. If so, be sure to ask for as much time as you think you need to put it together. Take detailed notes, but keep in mind you’re also free to record the session if you wish.

Realize that IRS appeals officers are trained to avoid losing a case in court, so they may negotiate a settlement with you. Be willing to do this, but be sure to ask them to waive any penalties assessed in the audit. When discussing the settlement, phrase your proposal in terms of items disputed or a percentage of what you owe. Once settled, the agreement is documented. You should receive a form a couple of months after your hearing. Read it, look for any errors and contact the IRS if you have any questions. But once you’ve signed the form, the matter is closed and cannot be taken up with the U.S. Tax Court.

Of course, each situation can differ and it’s a good idea to make sure you are up to date on the latest IRS policies. Be sure to talk to your tax advisor about the appeals process so you have a game plan for making an appeal that has a chance of winning.