If you’ve ever felt insulted by the IRS and confused by the IRS, you’re not alone. However, there’s a beacon of hope – the IRS Appeals process. Here at IRSMedic, we’ve leveraged this system for over two decades to secure tax justice for our clients. Whether you’re a taxpayer or a tax attorney, understanding the IRS Appeals process is crucial.
I’m Anthony E. Parent, Esq. and I’m here to share how I recently utilized the IRS Appeals process to secure a $257,000 refund for a client, which the IRS initially refused to acknowledge. Mastering this process can be one of the most valuable skills you learn for dealing with tax issues.
Your Right to Appeal: When and How
- Collection Due Process (CDP) Hearings: Under sections 6320 and 6330 of the Internal Revenue Code, you’re entitled to a CDP hearing if you receive a notice of a federal tax lien or a Final Notice of Intent to Levy. This is your chance to contest collection actions and suggest alternatives like installment agreements or offers in compromise. Remember, you get one CDP per tax period, but you might encounter two notices, giving you two opportunities to appeal by filing IRS Form 12153 within 30 days.
Practice Pointer #1: Always get proof of timely submission. Fax your appeal request rather than mailing it, and ensure you have the correct fax number by calling the number on your notice or 1-800-829-1040 if unsure. - Equivalency Hearings: If you miss the 30-day CDP window, you can still appeal within a year through an equivalency hearing. Although this doesn’t automatically pause collections like a CDP, in practice, it often does.
Practice Pointer #2: Look out for additional notices that could trigger new CDP rights, enhancing your negotiation leverage. - Post-Audit Appeals: After an IRS audit, if you disagree with the findings, you can appeal for a conference. Remember, the examiner isn’t the final word; IRS Appeals is.
Practice Pointer #3: Don’t waste time arguing with auditors. Know when to move the dispute to Appeals for a more definitive resolution. - Penalty Appeals: Contest penalties with Appeals; this includes international issues like Forms 3520, 5471, and 8938, where we’ve seen significant success.
- Offer in Compromise (OIC) Rejection Appeals: If your OIC is rejected, appeal within 30 days.
Practice Pointer #4: Present your OIC within a CDP for better negotiation leverage due to the threat of tax court or bankruptcy. - Trust Fund Recovery Penalty (TFRP): If you’re hit with a TFRP for failing to deposit employment taxes, you can appeal if you can prove you weren’t directly responsible.
Practice Pointer #5: Even if you’re a business owner, you might avoid personal liability for TFRP with the right appeal strategy. - Collection Appeals Program (CAP): When the IRS steps out of line, CAP can remove illegal levies or liens.
Practice Pointer #6: You’re entitled to a CAP if your installment agreement proposal is rejected, even without prior CDP rights. - CP504 Notices: This isn’t the final notice to levy, but it’s a warning to prepare.
- Post-COVID Appeals Strategy:
Practice Pointer #7: Be proactive in communication with remote Appeals officers. Monthly follow-ups are key.
Practice Pointer #8: Treat your appeal like a litigation case. If the IRS sees you’re prepared for court, they’re more likely to settle favorably.
Conclusion
Navigating the IRS Appeals process can protect your finances and sanity. At IRSMedic, we’re here to help you through this. Remember to subscribe, turn on notifications, and if you need expert assistance, schedule a consultation at www.irsmedic.com/help.