Why should you use the appeals process
Even if you mostly agree if your examination report, it’s worth trying a tax appeal. In the majority of cases, appeals have positive results. Although officers can discover and raise new issues previously missed, this happens extremely rarely.
The purpose of the Office of Appeals is to resolve more cases in a satisfactory way for both the IRS and taxpayer and promote voluntary compliance. Their aim is to reduce the number of cases going to court, which aggravates the situation and increases the cost for both sides.
Usually, the Office of Appeals takes a more gentle stance and agrees to a reduction of the tax adjustments proposed by the IRS auditor. Furthermore, the appeals process adds months of delay to your taxes. The time can help you organize your finances, pay your taxes and solve the problem.
Despite the massive savings potential, less than 10% of all audited taxpayers file an appeal. Many are discouraged or intimidated by the IRS and forgo pursuing an appeal, thinking they may worsen the situation.
Here are some examples of appeals you can make:
Invoking the Office of Appeals is a straightforward process, but the IRS will require you to exhaust all lower level options, before letting you appeal formally. There is some red tape involved and appeals are time sensitive. Taking the wrong action at the wrong time can lose you the opportunity to make a proper appeal.
We recommend consulting a tax professional before pursuing an appeal. A tax lawyer will investigate your case and identify any drawbacks of using the appeals procedure, making sure you don’t make the problem worse.