What Happens During an IRS Appeals Conference?

If you’ve filed a formal protest to an IRS decision, your case will eventually be assigned to an Appeals Officer. The "Appeals Conference" is the heart of the process. For many taxpayers, this is the first time they speak with an IRS employee whose role is independent and impartial.

If you’re feeling nervous, don't be. Unlike a courtroom drama, an appeals conference is surprisingly informal. Here is what you can expect.

1. It’s Usually Not In-Person

In years past, you would walk into a sterile federal building for a face-to-face meeting. Today, the vast majority of IRS Appeals Conferences are held via telephone.

• This is actually a benefit for taxpayers: it’s less intimidating and allows your tax attorney to join from their office.

2. The Appeals Officer is Independent

The most important thing to know is that the Appeals Officer does not work for the auditor or the collections agent you’ve been dealing with. Their mission is to resolve tax controversies without going to court.

• They have not seen your "personality" through the auditor's eyes; they will start with a fresh review of the administrative file.

3. The Atmosphere is Informal

There is no judge, no jury, and no court reporter transcribing your every word. You aren't "testifying" under oath in the traditional sense, though you are expected to be truthful.

• The conference is a discussion. The officer will explain the IRS’s position, and you (or your representative) will explain why that position is incorrect based on tax law or the facts of your case.

4. The Magic Phrase: "Hazards of Litigation."

In an audit, the rules are black and white. In Appeals, there is a gray area. The Appeals Officer is required to consider the "Hazards of Litigation." * They ask themselves: "If this taxpayer takes us to Tax Court, what are the chances the IRS will lose?" * If they think there’s a 40% chance the IRS will lose, they are authorized to "settle" the case by giving you a 40% discount on the tax bill. This is where the real negotiation happens.

5. You Don’t Usually Get an Instant Answer

Don't expect the officer to say, "Case closed, you owe zero" at the end of the call. Typically, the officer will listen to your arguments, request any follow-up documentation, and then review everything.

• You will typically receive a written Notice of Determination or a settlement agreement (Form 870-AD) several weeks later.

Three Tips for a Successful Conference

1. Be Organized: Have your receipts and the specific tax code sections you rely on ready.
   
   
2. Stay Professional: Being angry at the "system" won't help. The Appeals Officer is trying to close a file; making their job easier with clear facts is the best way to win.
   
   
3. Have a Representative: While you can represent yourself, having a tax attorney or Enrolled Agent is highly recommended. They speak "IRS language" and know exactly which legal precedents to cite to trigger a settlement.

Next Steps:If you have received a letter from the IRS offering an appeals conference, the clock is ticking. You usually have a limited window to schedule this meeting.