Administrative Appeals of Audit Results

IRS Office of Appeals

Within the IRS there is an office of appeals that is designed to resolve tax controversies with the IRS, without litigation, on a fair and impartial basis. Appeals will consider protested cases by reading correspondence, holding conferences, and negotiating settlements. A taxpayer can file for an appeal of an audit result after the IRS issues what is colloquially called a 30-day letter, or sometimes after a petition is filed with the tax court.

Appeal of an IRS Auditor's Decision

Upon completion of an IRS audit, the taxpayer will receive a detailed examination report. This report outlines the proposed adjustments and provides an itemized breakdown between taxes, interest, and penalties. The IRS requests that the taxpayer sign an assessment accepting the proposed adjustments. If the taxpayer chooses not to sign, the IRS will issue a 30-day letter. At this point, if the taxpayer desires to administratively appeal the auditor‘s decision they must file a formal protest or they can file Form 12203 if the amount in controversy is less than $25,000.

In order to file an appeal, after the taxpayer receives a 30-day letter, the taxpayer must send a formal written protest to the area manager. The formal protest must contain a statement of facts, law, and an argument that supports the taxpayer‘s position. If the protest is deficient, it will be returned to the taxpayer.

After a formal protest is perfected with the IRS, the area manager will either accept the protest, or if the IRS maintains their position, the protest will be forwarded to the appeals office. At this point the taxpayer should get notified of their conference rights.

What happens if an Agreement Cannot be Reached with Appeals

If an agreement cannot be reached with the Office of Appeals, the IRS will issue a final adverse determination letter or statutory notice of deficiency. The taxpayer may then petition the court within the statutory period (usually 90 days). If the case is already docketed with the Tax Court and an agreement is reached, the Court will dispose of the petition by way of stipulation.