How To Appeal An IRS Tax Decision: A Step-By-Step Guide

If you’ve received a threatening or alarming notification from the IRS, it’s understandable to feel overwhelmed. Take a moment to breathe and remember that help is here. This article will guide you through the basics of appealing IRS decisions, including:

• The deadlines for filing an appeal with the IRS
• What types of IRS decisions can be appealed, and the procedures involved
• Why it’s essential to work with a tax resolution attorney when filing an appeal

What Types Of Tax Decisions Can Be Appealed?

While not every IRS decision can be appealed, several key actions are eligible for review. You can appeal:

• A final notice of intent to levy
• A notice of deficiency
• A penalty abatement denial

Appeals provide an opportunity to challenge IRS decisions, and in many cases, there are multiple routes to address the same issue. One of the advantages of the U.S. tax system is that you essentially get “two bites at the apple.”

First, you can seek a resolution through IRS Appeals. If that doesn’t resolve the matter, you can then escalate the issue, which may involve the U.S. Attorney’s Office. Interestingly, attorneys in these cases often take a more reasonable approach than the IRS itself.

How Long Do I Have To File An Appeal With The IRS?

The time limits for filing an appeal with the IRS depend on the type of notice you’ve received and the specific circumstances of your case. Here’s a breakdown of common scenarios:

• Final Notice Of Intent To Levy

You have 30 days to file for a Collection Due Process (CDP) hearing. If there’s still significant time left on the collection statute, this is usually the best option. Filing for a CDP hearing is especially important if there’s a revenue officer assigned to your case, as they can proceed with levies if you don’t take action within the 30-day window.

• Equivalency Hearing

If you miss the 30-day deadline for a CDP hearing, you can still file for an equivalency hearing up to one year after receiving the final notice of intent to levy. However, if a revenue officer is involved, this option may not protect you from a levy. What’s more, it’s important to keep in mind that the equivalency hearing is not a statutory right, but it’s IRS policy not to levy while an equivalency hearing request is pending.

This strategy is often useful when the IRS’s collection statute is nearing its expiration. For instance, if the IRS has only one year left to collect a debt, by the time an equivalency hearing is processed, most of that time may have passed, and the IRS may collect little or nothing.

• Notice Of Deficiency

If you receive a notice of deficiency, typically as a result of an audit, you have 90 days to file an appeal with the U.S. Tax Court. This is a firm deadline, and missing it limits your options for resolving the issue.

• Audit Reconsideration

If you miss the 90-day deadline to appeal a notice of deficiency, you can request an audit reconsideration. While this is an alternative to Tax Court, it’s generally a slower process, often taking a year or more to resolve. In contrast, cases in Tax Court can often be settled in six months or less, making Tax Court the preferred route when the timeline permits.

Attorney Lance Drury is a highly experienced U.S. tax resolution lawyer based in Missouri who has helped countless clients across the state and country deal with the IRS. After over 20 years of successful appeals and exceptional outcomes for his clients, he is writing to empower the rest of the country with the tools needed to deal with tax dilemmas.

If you need to contest an IRS decision or threat, contact The Law Office of Lance R. Drury today to schedule an initial consultation.

Why Do Things Take So Long When Dealing With The IRS?

The IRS has faced significant delays in recent years, largely due to disruptions caused by the pandemic. In 2020, the IRS paused many collection activities, including levies, and shifted personnel from collections to processing a backlog of over 21 million unprocessed tax returns. These changes, combined with staffing shortages and improper training for new employees, have resulted in more errors and slower responses.

If you’ve been dealing with the IRS recently, you may notice that their guidance and actions can be inconsistent or even incorrect. Navigating these challenges on your own can be difficult, as it’s hard to know if the information you’re receiving is accurate – which is why working with an attorney is so helpful.

Remember, time is critical when responding to IRS notices, so it’s important to act quickly and ensure you’re taking the right steps to protect your rights. Our experience in handling IRS matters every day allows us to cut through this confusion and ensure that your appeal is handled correctly and within the necessary time limits.

What Evidence Should I Gather Before Appealing An IRS Decision?

Each appeal requires different types of evidence, so it’s important to gather the right documents based on the type of appeal you’re filing:

1: Final Notice Of Intent To Levy

1. Ensure you’ve filed your last six years of tax returns.
2. Gather your complete financial statements. These will help in reaching a resolution with the settlement officer.

2: Notice Of Deficiency

1. Gather proof of the expenses reported on your tax return, such as receipts or statements.
2. Be ready to provide documentation for deductions the IRS is questioning, like rent or vehicle expenses.

How Does The IRS Appeal Process Typically Work?

The IRS appeal process can be slow, with timelines varying based on what you’re appealing. Here’s a general overview:

• Collection Due Process (CDP) Hearings and Equivalency Hearings: These typically take at least six months to resolve.
• Offer in Compromise (OIC): If you’re appealing the denial of an OIC, the process can take much longer, sometimes over a year or more. Delays often occur when IRS agents handling the case leave, causing the process to restart with someone new.
• S. Tax Court: We tend to prefer the U.S. Tax Court because it moves faster. Even then, it can still take around six months for a resolution.

Is There Anything I Can Do If My Appeal Is Denied?

If your appeal is denied, you may still have options. In some cases, you can take the matter to the U.S. Tax Court. However, if the denial involves an assessment (e.g., the IRS says you owe $60,000), this doesn’t mean you’ll necessarily have to pay the full amount.

In fact, 85% to 90% of our clients don’t pay the full balance back to the IRS. Instead, your payment is determined by your ability to pay, which you must prove to the IRS. In some cases, 10% to 15% of clients pay little to nothing, depending on their financial situation.

Attorney Lance Drury is a highly experienced U.S. tax resolution lawyer based in Missouri who has helped countless clients across the state and country deal with the IRS. After over 20 years of successful appeals and exceptional outcomes for his clients, he is writing to empower the rest of the country with the tools needed to deal with tax dilemmas.

If you need to contest an IRS decision or threat, contact The Law Office of Lance R. Drury today to schedule an initial consultation.

Do I Need A Tax Attorney To File An IRS Appeal?

While it is not a legal requirement to get an attorney’s help with your IRS appeal, it is something you should strongly consider. Here’s why:

Many people believe they can handle an IRS appeal on their own, but it’s not as straightforward as it seems. I recently had a client who stopped working with me, thinking she could manage the situation herself. A year later, she returned, saying she had only made the problem worse. While it might seem simple, the complexity of IRS rules and procedures can quickly overwhelm someone without the proper experience.

As a tax attorney, my team and I dedicate 50 to 100 hours or more each year to continuing legal education specifically focused on IRS issues.  For example, in less than two months, we’ll be attending a three-day seminar hosted by the American Society of Tax Problem Solvers to stay updated on the latest developments.

For our team, this isn’t just tax law; it’s about the best strategies to handle IRS appeals and resolve tax problems.

Why Lance Drury Law Is A Firm You Can Trust

1. Experience Matters
   Just like you wouldn’t shop around for the cheapest heart surgeon if you needed surgery, you shouldn’t choose your tax attorney based solely on price. Handling an IRS appeal requires deep knowledge and experience—this is all we do, every single day. Our focus is entirely on resolving IRS issues, and that can make all the difference in your outcome.

• Accountants Aren’t Always Enough
  While accountants are excellent with numbers, they typically focus on tax preparation, not on dealing with the IRS when things go wrong. Every attorney in our office has seen clients get bad advice from accountants when it comes to IRS appeals. Tax attorneys have a laser focus when it comes to navigating the complex legal processes involved with the IRS.
• Getting The Right Representation Matters
  It’s important to choose a local attorney who specializes in IRS issues, rather than a large national firm that may not provide the personal attention your case needs. We always encourage potential clients to check us out thoroughly because we’re confident in the quality of our service. Working with a tax attorney from our firm means that you’re getting the insight you need to navigate the complexities of the IRS appeal process and avoid making costly mistakes.

Need to file an appeal with the IRS? Anxious about a tax issue?

For more information on How To Appeal An IRS Tax Decision, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling 573-883-3056 today.