Overview
An IRS appeal is your right to ask an independent Appeals Office to review an IRS decision that you believe is incorrect. Appeals exist to resolve disputes without litigation when possible and to provide an impartial review separate from the examining agent or collection officer (IRS Appeals: https://www.irs.gov/appeals).
In my practice advising taxpayers for over 15 years, the cases that succeed on appeal are those where the taxpayer presents a concise, well-documented factual record and focuses on the narrow legal or factual issue the Appeals Officer must decide. This guide walks you through how to file, build a winning case, common pitfalls, and next steps if Appeals does not rule in your favor.
When can you appeal and where to start?
Deadlines and appeal routes depend on the letter or notice you received. Many IRS notices include a 30-day deadline to request Appeals review, but some actions (for example, a Notice of Deficiency) have different timeframes (see the specific notice). Always read the cover letter for the exact deadline. If unsure, contact the phone number on the notice and keep a dated record of the call.
Start by: 1) identifying the notice type; 2) reading the Appeals rights section on the notice; and 3) preserving deadlines. If the notice does not clearly state Appeals rights, the IRS Appeals page and Publication 556 explain typical routes and timelines (Pub 556: https://www.irs.gov/pub/irs-pdf/p556.pdf).
Step-by-step: How to file an IRS appeal
- Identify the procedural route
- Exam (audit) cases: you typically request an Appeals conference after receiving a proposed adjustment or notice of deficiency.
- Collection cases: you may request a Collection Due Process (CDP) hearing or an Equivalent Hearing.
- Refund or penalty disputes: you may submit an administrative appeal or use a formal claim process.
(See IRS Appeals guidance: https://www.irs.gov/appeals.)
- Choose the correct form or method
- Many cases use Form 12203 (Request for Appeals Review) for certain notices; collection matters often use CDP request procedures.
- Other forms and claims (for abatement or refund) may use Form 843 or the refund claim process.
When filing, include a clear statement of the issue, the relief requested, and the grounds supporting your position.
- Prepare a tight evidence packet
- One-page case summary that states: (a) the issue; (b) the chronology; (c) the requested outcome; and (d) the key facts/law.
- Relevant tax returns, ledgers, invoices, canceled checks, receipts, third-party statements, or valuation reports.
- Copies of the IRS notices being appealed and any prior correspondence.
Good organization matters: label and tab documents, include a table of contents, and provide a PDF that mirrors the paper packet if sending electronically.
- Explain the law and facts concisely
- Cite the tax code, regulations, or authoritative IRS guidance when it helps your argument.
- Avoid long, emotion-driven narratives; Appeals Officers decide on law and facts, not sympathy.
- File on time and follow filing instructions
- Send your packet to the address or upload point specified in your notice.
- Keep proof of mailing or electronic delivery.
- Engage in the Appeals process
- Appeals may start with a conference (in-person, by phone, or virtual).
- Be prepared to negotiate. Appeals aims to reach a fair resolution based on legal merits and hazards of litigation.
- If you reach an agreement, the resolution will be documented in a closing agreement or Form 870 (Waiver of Restrictions on Assessment and Collection of Taxes) or similar document.
Building a successful appeal: practical strategies
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Be narrow and specific: Appeals Officers prefer to decide a single issue at a time. A focused appeal increases the odds of a favorable, faster resolution.
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Quantify uncertainty: show how the IRS’s position is weak or how litigation risk favors your position—this is how Appeals evaluates cases under a ‘‘hazards of litigation’’ analysis.
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Use independent evidence: third-party documentation, sworn statements, valuation reports, and industry benchmarks strengthen credibility.
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Maintain organized communications: keep a log of phone calls, dates, names, and what was discussed. Provide copies of any changed positions to the Appeals Office promptly.
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Consider expert witnesses or valuation reports for complex matters (e.g., business valuations, forensic accounting).
Common issues and mistakes to avoid
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Missing deadlines: a late appeal may forfeit administrative remedies. Always calendar the deadline and plan to file early.
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Overloading the file: too much irrelevant documentation can obscure the key facts. Quality over quantity—use a clear index.
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Failing to address the IRS’s stated reason for the adjustment: your response should speak directly to the IRS’s specific findings.
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Letting emotions drive the narrative: stick to facts and law.
Appeals outcomes and next steps
Possible outcomes include: full agreement for the taxpayer, partial agreement, denial, or a settlement that avoids litigation. If Appeals denies relief, typical next steps include:
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Petitioning the U.S. Tax Court (for income tax deficiency cases) within the statutory period (e.g., 90 days for notices of deficiency). (U.S. Tax Court: https://www.ustaxcourt.gov)
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Paying the tax and filing a refund suit in Federal District Court or the Court of Federal Claims if appropriate.
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Negotiating collection alternatives such as installment agreements, currently not collectible status, or Offers in Compromise. See our guide to Offers in Compromise for alternatives to litigation and collection relief: Offers in Compromise: How to Settle Your Tax Debt for Less.
If your appeal arises from an audit, our detailed checklist on preparing for appeals conferences can help you make a strong presentation: Tax Audit Appeals: How to Prepare for the Appeals Conference.
For help deciding when to hire representation, see: When to Hire a Tax Professional for an Audit or Appeal.
Example case (short)
A client received a proposed adjustment disallowing a large business meal deduction. We prepared a one-page summary, submitted contemporaneous receipts, daily logs, and client testimony showing business purpose. In Appeals, the IRS conceded part of the adjustment and allowed a reasonable portion of the deduction. The resolution preserved cash flow and avoided Tax Court.
Checklist: Documents to include with an appeal
- Copy of the IRS notice and all prior correspondence.
- One-page issue summary and relief requested.
- Copies of returns implicated and amended returns if applicable.
- Receipts, contracts, invoices, bank statements, and third-party letters.
- Expert reports or valuations when relevant.
- Proof of mailing and any prior phone-call documentation.
Final tips and professional disclaimer
Be proactive: Appeals is neutral but fact-driven. Preparing a concise, credible, and well-supported file is the most effective thing you can do. If a case involves complex legal questions or substantial sums, consider obtaining representation from a CPA, EA, or tax attorney—representation can improve the outcome and reduce stress. (In my experience, represented taxpayers often reach better settlements because issues are framed more persuasively.)
This article is educational and does not replace personalized tax advice. For guidance tailored to your circumstances, consult a qualified tax professional.
Sources and further reading
- IRS Appeals: https://www.irs.gov/appeals
- IRS Publication 556, Examination of Returns, Appeal Rights, and Claims for Refund: https://www.irs.gov/pub/irs-pdf/p556.pdf
- U.S. Tax Court: https://www.ustaxcourt.gov
- FinHelp glossary: Offers in Compromise (internal): https://finhelp.io/glossary/offers-in-compromise-how-to-settle-your-tax-debt-for-less/
- FinHelp glossary: Tax Audit Appeals (internal): https://finhelp.io/glossary/tax-audit-appeals-how-to-prepare-for-the-appeals-conference/
- FinHelp glossary: When to Hire a Tax Professional (internal): https://finhelp.io/glossary/when-to-hire-a-tax-professional-for-an-audit-or-appeal/
