Appealing within the IRS is an Option for Tax Disputes
A taxpayer may feel powerless against the mighty IRS, but an individual or business who feels they are being overcharged on an income tax adjustment has the option to appeal. Even the place they file the appeal is not predetermined.
Besides tax court, appeals can be handled by the local IRS appeals office. It is not necessary to appeal within the IRS before going to tax court; which route to take likely depends on each taxpayer’s individual case and circumstances.
Depending on the size of the tax bill in dispute, the appeal will either be a small case request or a formal protest. A small case request is for cases involving taxes, penalties and interest totaling $25,000 or less. The taxpayer making a small case request should include a brief written statement requesting an appeals conference, and explaining the changes to the taxpayer’s bill that he or she does not agree with, and why.
A formal protest, on the other hand, requires a somewhat more formal application. It must include a copy of the IRS letter proposing the disputed tax adjustment, the tax years involved, and other relevant facts.
The taxpayer, with the help of his or her attorney, should cite the laws and authorities he or she is relying on in the appeal. Note that nothing outside the scope of tax law, like refusing to pay taxes for religious or political reasons, is a legitimate reason to appeal. Finally, the taxpayer signs the protest, declaring under penalty of perjury that it is factual and complete to the best of his or her knowledge.
The ensuing conference can be conducted in person, over the phone or through correspondence. Taxpayers are allowed to be represented by an attorney.
