Navigating IRS Tax Appeals: What You Need to Know
202408.22
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Navigating IRS Tax Appeals: What You Need to Know

in Legal Services

Are you facing a dispute with the Internal Revenue Service (IRS)? If you’ve received a decision you disagree with, you might have the right to appeal. In this post Ploeg and Brown will guide you through the basics of IRS tax appeals, helping you understand when and how to challenge an IRS decision.

When Should You Consider an Appeal?

Before diving into the appeal process, it’s crucial to know if your situation warrants an appeal. You may want to consider appealing if:

  1. You disagree with the amount of taxes the IRS says you owe
  2. You dispute the outcome of an IRS audit
  3. You believe a penalty assessment is unfair
  4. You disagree with a collection action taken by the IRS

However, appeals aren’t always the best course of action. You might want to reconsider appealing if:

  • You’ve already signed a payment agreement with the IRS
  • You’ve missed the appeal deadline (usually 30 days from the decision notice)
  • You haven’t attempted to resolve the issue with your assigned IRS agent
  • You failed to provide requested information during an audit
  • Your most recent IRS letter doesn’t mention appeal rights

Types of IRS Appeals

The IRS offers several appeal options depending on your specific situation:

  1. Collection Appeals Program (CAP) Use this for issues like federal tax liens, levies, asset seizures, and installment agreement disputes.
  2. Collection Due Process (CDP) Hearings This allows you to challenge IRS collection actions such as levies, seizures, and liens.
  3. Offer in Compromise Appeals If your offer to settle your tax debt for less than the full amount owed is rejected, you can appeal this decision.
  4. Trust Fund Recovery Penalty (TFRP) Appeals Business owners or responsible individuals can appeal this penalty related to unpaid payroll taxes.
  5. Tax Levy and Lien Appeals You can challenge these severe collection actions through specific appeal processes.

Filing an IRS Protest

To initiate an appeal, you’ll need to file an IRS protest. The process differs slightly based on the amount in dispute:

  • For disputes under $25,000: Submit a small case request – a brief statement explaining your disagreement.
  • For disputes over $25,000 or specific entity types: File a formal written protest including your contact information, disputed issues, reasons for disagreement, and supporting facts and laws.

Key Tips for a Successful Appeal

  1. Act quickly: Most appeals must be filed within 30 days of receiving the IRS decision notice.
  2. Be thorough: Provide detailed explanations and all relevant information in your protest.
  3. Use the right forms: Depending on your situation, you may need to file specific forms like Form 12153 or Form 13711.
  4. Consider professional help: Tax attorneys or enrolled agents can significantly improve your chances of a favorable outcome.

Remember, the appeals process can be complex and time-consuming, often taking several months to resolve. It’s crucial to approach it with patience and preparation.

While facing an IRS dispute can be time consuming, understanding your appeal rights and options can help you navigate the process more effectively. If you’re unsure about your situation or need assistance with an IRS appeal, don’t hesitate to consult a qualified tax professional here at Ploeg and Brown. They can provide expert guidance tailored to your specific circumstances and help you achieve the best possible outcome.