It’s okay to disagree with the IRS: Knowing your appeal rights
Do you disagree with the IRS, and are becoming frustrated because no one is listening?
Maybe you are under audit, and the IRS Revenue Agent is being difficult, taking unreasonable positions, or proposing changes to your tax return that are wrong, but refuses to see it your way.
Or maybe you already owe money to the IRS, and their collection division is coming on strong, requesting payment terms you cannot afford, or levying your assets.
You do not need to feel like the IRS has the upper hand. IRS power does need to be respected, but at the same time there are options to even the playing field.
The IRS has an entire appeals division devoted to reviewing decisions that taxpayers disagree with. Most likely, that means the adverse decision you are facing is not necessarily the final decision.
IRS appeals has jurisdiction to review audit or collection decisions that include the following:
- Rejected offers in compromise.
- Terminated and denied installment agreements.
- Audit examination reports.
- Notices to levy your property, including wages, accounts, and real estate.
- Refusals to grant innocent spouse relief.
- Decisions of IRS Revenue Officers about your ability to repay your taxes, including a notice of intent to seize and sell your property.
- Determinations of personal liability for employment taxes (trust fund recovery penalty).
- Disagreement with the IRS filing a Federal tax lien against your property.
- IRS refusal to give you penalty relief.
In other words, pretty much any decision an IRS agent makes that you disagree with comes with appeal rights.
The nice part about IRS appeals is that the employees are independent of the IRS examination and collection divisions. They do not interact with the agent who made the decision you disagree with. IRS appeals officers are charged with being fair and impartial, to resolve disputes taxpayers have with the IRS. They look at cases much differently than an IRS auditor or collection agent.
Auditor’s dig and investigate tax returns – their job is to uncover tax claims that you are not entitled to, either because they are not legally permissable, or you cannot verify income or expenses.
Revenue Officers and ACS agents collect taxes – they look into your finances, and try to uncover how you can repay a tax debt. They have tools at their disposal to aid their IRS collection powers, like levying your assets.
The jobs of both auditors and and IRS collection agents are necessary, but the IRS does have a system of checks and balances in their appeals division.
Appeals officers are trained to resolve disputes, not create them. They do not audit your returns, or levy your wages. They try to find a better solution. They consider your point of view not as an auditor or Revenue Officer would do, but more as a disinterested third party.
I have found appeals officers to be equitable, sophisticated, fair-minded, flexible, and geared to reach resolution that works for both you and the IRS. If you are tangled-up and in knots over the handling of a case by an auditor, Revenue Officer, Automated Collection Service collection agent, or even an offer in compromise investigator, consider exercising your appeal rights. It may be uncomfortable, but it can be okay to disagree with the IRS, and know that there are higher levels of review that can offer a fresh perspective.