Understanding how Taxpayers may Appeal to the IRS Office of Appeals was published by JD Supra on 7/16/19.
IRS has an Office of Appeals (OOA) that operates as an “independent” organization within the IRS. The goal of the OOA is to
help Taxpayers resolve their tax disputes through an informal, administrative process, and through weighting IRS’ risks of litigation. The OOA aims to resolve tax controversies “without litigation” avoiding expensive and time-consuming court proceedings. The OOA will assign an appeals officer or a settlement officer to review the strengths and weaknesses of the position(s) taken by the Taxpayer. The reviews may be conducted by correspondence, telephone or at a personal meeting.
Who may appeal to the OOA?
- A Taxpayer that has received a letter from the IRS explaining the Taxpayer’s right to appeal a decision taken by the IRS.
- A Taxpayer that does not agree with a decision made by the IRS.
- A Taxpayer that is not signing an agreement form sent to him/her by the IRS.
Who may NOT appeal to the OOA:
- A Taxpayer that received correspondence from the IRS with a bill without mention of Appeals.
- A Taxpayer that did not provide all the information to support his/her position to an IRS examiner during an audit.
- A Taxpayers whose only concern is an inability to pay the amount owed.
Taxpayers with IRS appeal rights may work directly with the IRS or be represented
A Taxpayer that wants third party representation must choose a representative that is authorized to practice before the IRS – a C.P.A., Attorney or Enrolled Agent – and submit FORM 2848 (Power of Attorney and Declaration of Representative).
Taxpayers must be ready to Explain their disagreements to the OOA
The OOA requires that Taxpayers that have been granted an Appeal have supporting documentation if they believe that the IRS is incorrect. Taxpayer disagreements stem from the:
- IRS making an incorrect decision due to misinterpreting the law
- IRS not properly applying the law due to a misunderstanding of the facts
- IRS taking an inappropriate collection action against the Taxpayer
- Taxpayer not agreeing with the denial of an Offer in Compromise
What if a Taxpayer is working with an Appeals officer and still has unresolved issues?
Taxpayers could seek the services of an Appeals Mediator. The Appeals mediator is trained in mediation techniques and is independent of the Appeals employee with whom the Taxpayer has been working during the Appeals process.
Don’t be a victim of your own making – it is best to retain Representation
Taxpayers ought to consider retaining representation in order to diminish the risks of litigation. There are benefits of settlement over litigation which include:
- Speed of resolving the matter at hand
- Cost effectiveness
- Reduced Risk
Taxpayers ought to consider providing a signed and dated Power of Attorney to a Permitted Representative requiring simultaneous notification receipt for the Representative.