How to Appeal and IRS Audit

After the IRS has completed their audit report, you will be given a certain amount of time to pay the tax bill. If you decide to appeal the results, the collection of your tax bill will be delayed for a long period of time; sometimes months and possibly even years. That is one of the reasons that utilizing the appealing process may work to your benefit. If you do not have the funds to pay the bill right away, file for a free appeals hearing. If that doesn’t work or you still don’t have enough money, then you can take the decision to tax court.

Appealing the audit may reduce your total tax liability, though it rarely reverses the audit report in it’s entirety. The first step is to appeal the decision with the IRS. Send a certified letter to the IRS stating that you wish to appeal the report. The appeals office will send an independent agent who is separate from the department who handled your audit.

The appeals department does not want you to take this matter to tax court. They would prefer to settle the matter themselves. Write a letter and send it to the local IRS director, stating why you are appealing it, and what your intentions are. Prepare your documents, organize them carefully and be sure that you understand exactly what is going on as well as what they are asking for and why you are appealing the IRS audit report. When you appeal, make a Freedom of Information Act Request. This entitles you to the auditor’s records, allowing you to see what they see. This will give you a better position when you go in to talk with the appeals agent.

As long as you are well prepared and you have done thorough research, you should be able to complete the entire appeals process on your own without hiring a professional. It is recommended however, that once you feel you understand all of the report as well as the appeals process and requests that you have a consultation with a tax consultant. This meeting should take place prior to meeting with the appeals officer. This may point out a few things you didn’t discover in your research stage or offer needed tips that you wouldn’t have otherwise known. This is a cheaper alternative than hiring a professional to handle the entire ordeal or even a tax attorney for court litigation.

In order to be offered a settlement, you must show the appeals officer that you would have some chance of winning or reducing your tax bill in tax court. This is why preparation and understanding is so important in this step of the appeals process.