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Tax Appeals Process

Sometimes, taxpayers may come under review by the IRS. To handle the overwhelming number of audits each year, the Internal Revenue Service established an Office of Appeals. Here’s what you should know about the tax appeals process.

What Is a Tax Appeal?

Organizing and paying taxes is frustrating no matter how many times you do it. The forms are long and filled with complicated legal terms you aren’t familiar with, and unless you go to a CPA or a tax filing business like H&R Block, you’re stuck with completing the forms on your own.

Even if you do have someone to do your taxes, mistakes happen. Unfortunately, the IRS isn’t very forgiving when it comes to errors, and when there’s an issue, they may audit you. An audit is essentially an investigation into your finances to determine whether you defrauded your taxes or if there was simply an error.

Audits are incredibly stressful and take an immense amount of resources to resolve. To handle the demand, the IRS created the Office of Appeals. If a taxpayer is audited, they can file an appeal to resolve any disagreements.

For example, you claim the items you used to furnish your home office last year, but the IRS disputes your claim. In that case, you can file an appeal.

How To File a Tax Appeal

Before you can officially file an appeal, you’ll need to submit a formal request to the IRS stating your intent to remove the penalty or charge. Always include your personal contact information and admission of your intention to file an appeal. Once you’ve done this, the appeals process can begin. Below is a checklist for your request letter.

Formal Request Checklist:

  • The IRS audit notification
  • Personal contact information
  • An affirmative statement of your intent to appeal
  • Relevant tax years
  • Statements of law that support your appeal

It’s always best to have your request letter checked by a professional.

Once the appeals process has begun, auditors will comb through the documents, cross-check their records, and look for discrepancies. You will probably not be involved in the investigation process unless the IRS has questions about a specific document or requests more information.

You do have the right to request an appeals conference with the Office of Appeals. This is an informal meeting where an officer instead of a judge addresses the case. They can look over your documents and address issues with you directly. If for any reason, you are dissatisfied with their final decision, you may file a lawsuit in court.

Tax Appeals in Court

If you choose to file a case with the court, you may file the amount of tax in dispute to the Court of Federal Claims or a District Court in exchange for a refund. You’ll need plenty of documentation and evidence to present to the court.

Also, keep in mind that should you refuse to pay the tax or cannot afford it, the U.S. Tax Court will address your case.

Do I Need an Attorney?

You don’t have to hire an attorney, but these cases are incredibly complicated, and a lawyer can be a great asset. Attorneys can handle the legal side of your case and help you protect your rights throughout the appeals process. They may also be able to use the evidence to persuade IRS officials and the appeals judge in a way that may result in a more positive outcome.

Facing the appeals court or IRS on your own may be overwhelming, and any missteps along the way could have extreme consequences. Don’t subject yourself to losses – hire an attorney.

Contact our tax appeals team at Buchalter & Pelphrey Attorneys At Law today for more information.

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