You know that the IRS can audit a person or a business for any number of reasons. What you may not be aware of is that you don’t have to accept the government’s conclusions as to the final say on whether or not you owe back taxes.

You can appeal an
IRS audit
in the same manner that you appeal a lesser court decision.
Appealing your case also postpones your tax bill’s due date for the duration of
the process, which can last for months. This additional time makes it easier
for you to work out a payment plan with the IRS or save the funds necessary to
pay the final assessment.

What is the Appeals Process?

When you receive
an official IRS decision after an audit, you have up to 30 days to file an appeal. (You can still appeal even after
the 30-day deadline, although the process is more difficult.) It is important
to note that appeals may only be made because you disagree with the
government’s determination and not due to a dispute based on political,
religious, moral, or similar grounds.

In addition to
your name, contact details, and a statement that you want to appeal the IRS
findings, your written dispute must include the following:

  • A copy of the IRS letter with the
    proposed changes
  • The tax period(s) or year(s)
    involved
  • The findings that you disagree
    with
  • The reasons for the disagreement
    and the facts that support these reasons
  • Applicable law or laws that
    support your position

If you owe less
than $2,500, you can request an appeal from your auditor. If the tax liability
you are appealing is between $2,500 and $25,000, you can submit Form 12203 to
file a Small Case Request instead of request a conference. Small Case Requests
are available to everyone except:

  • Partnerships
  • S-Corporations
  • Exempt organizations
  • Employee plans

If you owe more
than $25,000, your only option is to file a Form 12203.

What Happens After You File Your Dispute?

Upon receipt of
your dispute, an IRS Appeals Officer is assigned to your case. The Office of
Appeals mainly consists of former auditors with accounting or legal experience
who now occupy senior positions with the IRS. They provide taxpayers with an
impartial platform to plead their cases and usually try to avoid litigation by
finding solutions that encourage voluntary compliance with your tax obligation.

You usually have
60 days to prepare for the hearing, where you will be given the opportunity to
present your case, complete with documentation, statements, receipts, and other
financial information. The Appeals Officer will review all evidence and listen
to any legal arguments before making a final determination.

Most disputes
with the IRS are settled at the appeals stage. If you succeed at reaching a
settlement, the IRS will provide you with a Form 870- Consent to
Proposed Tax Adjustment
. If you sign it, you are effectively consenting to
the settlement and cannot challenge it in the future. If the conference fails
to produce an agreement, you can petition the U.S. Tax Court within 90 days of
receiving a Notice of Deficiency, also known as a 90-day letter.

Although
appealing an IRS audit can substantially reduce previously assessed taxes and
penalties, a comparatively low number of taxpayers appeal their audit results.
While some of them just want to get it over with, others feel that they have no
chance against the IRS and its resources. It’s an imbalance that you can
eliminate by engaging a tax audit attorney.

Contact a New Jersey IRS Audit Appeal Attorney

Even if you have
been dealing with the IRS up to the point that it concludes its audit, it is
strongly recommended that you engage an experienced tax attorney before
pursuing an appeal. Your attorney can attend the hearing on your behalf present
your position in a clear and convincing manner, using documentary evidence as
well as legal analysis and authority.

At Paladini Law, Attorney Brad Paladini has successfully represented many clients at IRS audit appeal hearings and will use his expertise in federal tax law to ensure a fair outcome to your case. For more information or to schedule a confidential consultation, please contact us or call 201-381-4472.

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