Taxes can be frustrating – especially when you receive an unexpected penalty or change. Fortunately, there’s something you can do about it. If you’re considering an IRS appeal, it’s essential to first do your homework so you can be prepared to make your case (and know whether you have a case to begin with). Here are a few tips to get you started – and remember, we’re always here to help.
To Appeal or Not to Appeal?
Below is a short list of the most common reasons for filing an appeal, along with a few things to keep in mind before beginning the process:
- Possible IRS Mistake
If you feel that the IRS made a mistake based on misinterpretation of law, first consult publications that discuss your issue. One handy resource is Tax Topics.
- Possible Misunderstanding/Misinterpretation
Could the IRS have misapplied the law do to a misunderstanding of facts? If you believe so, be prepared to clarify and support your position with appropriate documents and evidence.
- Inappropriate Collections
Is the IRS taking inappropriate collections from you? Or was your offer in compromise denied? You may have a case, but be prepared to explain and back up your position.
- Incorrect Facts
Did the IRS get the facts wrong? If you think so, make sure you have records and other evidence handy to support your claim.
Starting the Process – Know Your Options
When making an appeal, you don’t have to go it alone. Should you choose to have a member of our firm or another professional represent you, you may do so using Form 2848, Power of Attorney and Declaration of Representative. One of our trained professionals can talk you through the steps and paperwork necessary to open your case. Simply give us a call at 405-801-2146.
Or if you’d prefer to handle things on your own, there are also options available to you…keep reading.
In cases where the entire amount of additional tax and penalty proposed for each tax period is $25,000 or more, you are required to file a written protest in order to request an appeals conference. Your written protest must include the following:
- Taxpayer’s name, address, and telephone number
- A written statement saying you want to appeal IRS findings
- A copy of the letter with the proposed tax adjustment
- The tax periods/years involved
- A list of those items with which you do not agree, and reasons for your disagreement
- Facts to support your position (including copies of appropriate documents)
- The law or authority, if any, on which you are relying
Your signature underneath the following statement: “Under the penalties of perjury, I declare that I examined the facts stated in this protest, including any accompanying documents, and, to the best of my knowledge and belief, they are true, correct, and complete.”
Small Case Requests
If the amount of additional tax and penalty proposed for each tax period is $25,000 or less, you may file a Small Case Request. To do so, simply complete the following:
- Follow the instructions on the letter you received.
- Use Form 12203, Request for Appeals Review, or the form referenced in the letter to file your appeal, or prepare a brief statement. Be sure to list those items with which you disagree and the reasons you disagree.
- Pat yourself on the back – it’s that easy!
Now that you’ve made your appeal, you should expect to wait no more than 90 days for a first notice from the IRS (though a 90-day wait is not unheard of). If it’s been 90 days and you’re still waiting for an update, you may want to check in with the office to which you sent your appeal. It’s important to be patient when waiting for an appeals resolution, as it can take anywhere from 90 days to a year depending on the unique circumstances of your case. But it might just be worth it!
Phew…if all of this sounds like a lot to digest, don’t worry. We’re always here to help! Call us at 844-841-9857 or fill out our form for a free consultation to see how we can be of service.