When dealing with the Internal Revenue Service during the initial stages of a tax case, whether it involves an audit, collection issue, request for penalty relief, or a proposed plan of resolution such as an Offer In Compromise, taxpayers as well as tax professionals often overlook the right to resolution through the use of the IRS Independent Office of Appeals. The Office of Appeals is available in most cases to resolve disputes, without litigation, in a way that is fair and impartial to the taxpayer. The origin of cases reviewed by the Office of Appeals include:
- Examination Appeals, which involve the review and resolution of general docketed and non-docketed audit cases generated from the IRS audit deficiency determinations.
- Collection Appeals, which involve the review and resolution of cases involving Collection Due Process, Offers in Compromise, Trust Fund Recovery Penalties, Jeopardy Levies, Collection Appeals Program (CAP), and other such cases in which a taxpayer has been assessed a liability in which they are attempting to amicably resolve.
- Claim for Refund or Request for Abatement of Penalty Appeals, which involve the review and resolution of cases involving a taxpayer's claim for a refund of an overpayment of tax or request for an abatement of certain taxes, interest, penalties, fees, or additions to tax.
- Specialized Examination Programs & Referrals, which involve the review and resolution of a variety of specialized programs such as international issues, estate and gift issues, tax-exempt and governmental entity issues, tax computations, innocent spouse, TEFRA, art appraisal services and penalty appeals.
The Office of Appeals has the independent authority and jurisdiction over most cases it reviews, with the ability to compromise or concede issues that the IRS has previously decided against a taxpayer. The Office of Appeals ultimately settles, to the satisfaction of the taxpayer, approximately 80% or more of the cases it reviews. Being aware of the process and procedure involved in this resolution tool, including how to stage a case for the potential for such an appeal while it is under audit or in its initial investigation stage and how to present a case to the Office of Appeals once an appeal is elected, is key to a favorably and cost saving resolution in most cases.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.