How to Appeal an IRS Decision

Many taxpayers hesitate to appeal, fearing the process is rigged or unlikely to succeed. However, internal statistics often show that approximately 40% of appeals result in tax reductions.

Key Benefits:

• Low Initial Cost: There are minimal administrative fees associated with filing an appeal.
  
  
• Liability Reduction: Potential for significant reduction or elimination of the tax debt.
  
  
• Extended Timeframe: Filing an appeal can pause certain collection actions, giving you more time to arrange financing or gather documentation.

While often beneficial, there are risks to consider:

• "New Issues" Rule: An appeals officer may identify previously unnoticed tax liabilities, potentially increasing the amount you owe.
  
  
• Asset Discovery: During the review of an Offer in Compromise (OIC) or Installment Agreement, the officer may find additional assets or income.
  
  
• Interest Accrual: Interest and penalties continue to accumulate during the appeal. If the appeal is unsuccessful, your total balance will be higher than when you started.

Appeals are commonly filed under the following circumstances:

• Disagreement with collection actions (liens, levies, or seizures).
  
  
• Termination or modification of an installment agreement.
  
  
• Rejection of an Offer in Compromise.
  
  
• Disputing the findings of an IRS audit or the total tax amount owed.
  
  
• Disagreement with assessed penalties.

If any of these situations apply to you, filing an appeal may be a smart choice. Given the complexity of the appeals process, engaging a tax lawyer may help streamline the process.