Overview

An IRS assessment can feel like a final sentence, but for most taxpayers it isn’t. The IRS provides administrative paths to contest assessments without starting a lawsuit in U.S. Tax Court. These channels include the IRS Office of Appeals, Collection Due Process (CDP) hearings for collection actions, the Collections Appeals Program (CAP), and assistance from the Taxpayer Advocate Service (TAS). Using these routes preserves your rights, reduces costs, and often leads to negotiated, practical outcomes.

(Author’s note: In my 15 years helping clients with tax disputes, I’ve found that careful documentation and a calm, organized presentation to the Appeals officer resolves the majority of cases.)

Sources: IRS Office of Appeals (irs.gov/appeals); IRS Publication 556: Examination of Returns, Appeal Rights, and Claims for Refund (irs.gov/pub/irs-pdf/p556.pdf); Taxpayer Advocate Service (taxpayeradvocate.irs.gov).

Step-by-step: How to appeal administratively

  1. Read the IRS notice carefully

    Start by identifying the exact notice you received. Different notices trigger different appeal rights. For example, a Notice of Deficiency (90-day letter) allows you to petition Tax Court, while a Final Notice of Intent to Levy starts the clock for a CDP request. Publication 556 and the notice itself explain the time limits and options (IRS Publication 556).

  2. Try to resolve the issue informally first

    Call the number on the notice or respond to the IRS examiner’s contact. Many cases are corrected at the audit level after you supply missing documents, corrected returns, or clarifying explanations. Keep a written log (dates, names, callback numbers) of every interaction.

  3. File the right administrative request

  • Audit/Examination disputes: If an examiner closes a case and you disagree, you can request Appeals consideration. A written protest is usually required for larger disputes; smaller changes may be handled through an informal request. See IRS guidance on how to submit a protest in Publication 5 and Publication 556.

  • Collection actions (levy, lien): If you receive a statutory notice of your right to a hearing, file Form 12153 (Request for a Collection Due Process or Equivalent Hearing) to get a CDP hearing with Appeals. For other collection appeals, the Collections Appeals Program (CAP) or Form 9423 (Collection Appeal Request) may apply depending on the notice and stage. Confirm the correct form in the notice or on irs.gov to avoid procedural dismissal.

    There is no fee to file an administrative appeal with the Office of Appeals.

  1. Prepare a concise, evidence-based submission

    Appeals is not a rerun of the audit. It is a neutral review that focuses on the facts, the law, and the hazards of litigation. Prepare a clear statement of why the assessment is wrong, cite the tax code or regulations when applicable, and attach supporting documents (bank statements, contracts, corrected returns, third-party statements). Include a timeline and an index so the Appeals officer can follow your logic quickly.

  2. Consider representation

    A CPA, enrolled agent, or tax attorney can represent you using Form 2848 (Power of Attorney). In my practice, a professional representative helps frame legal issues, negotiate offers, and keep communications within procedural rules, which raises the chance of a favorable administrative resolution.

  3. Attend the Appeals conference

    Appeals conferences are less formal than court and often occur by phone or Zoom. Be prepared to explain your position succinctly and refer the officer to the exact documents you filed. If you ask for a face-to-face meeting, weigh the travel and scheduling costs against potential savings.

  4. Receive and evaluate the Appeals decision

    The Appeals officer will send a closing agreement, decision letter, or offer. If you accept, you sign a closing agreement (Form 906, Closing Agreement on Final Determination) or otherwise resolve the case. If Appeals sides with the IRS examiner and you still disagree, the letter will explain further options, including Tax Court (remember court deadlines).

Key deadlines and forms (summary)

  • Notice of Deficiency: 90 days to file a petition in U.S. Tax Court (150 days if abroad). This is your court option—not an Appeals requirement. (IRS Notice text)
  • Collection Due Process (CDP): Generally 30 days from the date of the CDP notice to request a hearing using Form 12153. (irs.gov)
  • Written protest for Appeals: Required for many examination cases exceeding certain dollar thresholds; check Publication 556 for exact protest elements.

Common forms you may encounter:

  • Form 12153 — Request for a Collection Due Process or Equivalent Hearing (CDP)
  • Form 9423 — Collection Appeal Request (when applicable for CAP)
  • Form 2848 — Power of Attorney and Declaration of Representative
  • Written protest — a narrative statement supplied per IRS rules (see Pub. 5/556)

Always follow the instructions and addresses on the IRS notice you received—procedural errors (wrong form, late filing, wrong address) can lose appeal rights.

What to expect in an Appeals conference

The Office of Appeals is independent from the exam and collections functions of the IRS. The officer reviews the disputed issues and the risks to the government of losing in court (the “hazards of litigation”). Appeals favors practical compromise over formal victories.

During the conference:

  • Open by stating the precise issues and the relief you seek.
  • Focus on documentation and legal support.
  • Clarify facts that the examiner may have missed or misinterpreted.

Appeals officers can recommend concessions, settlement figures, or alternative solutions such as penalty abatement, installment agreements, or Offers in Compromise. Expect the process to take weeks to months depending on complexity.

Strategies, documentation checklist, and tips

  • Create an evidence index: list each document and which point it supports.
  • Use chronology pages for transactions spanning years.
  • Provide calculations and reconciliations, not just statements.
  • Submit third-party corroboration where possible (bank records, vendor letters).
  • For penalties, prepare reasonable-cause explanations and any evidence of compliance history.
  • Consider mediation if Appeals and you reach an impasse—informal mediation or the IRS Appeals Mediation Program can help in selected matters.

Internal resources on FinHelp:

Alternatives if Appeals does not resolve the case

  • Petition U.S. Tax Court (for Notice of Deficiency cases) or litigate in federal district court or the Court of Federal Claims depending on how you proceed. Tax Court petitions must meet strict deadlines.
  • Use the Taxpayer Advocate Service if the issue causes economic harm or systemic delay (TAS is an independent organization that can intervene; taxpayeradvocate.irs.gov).
  • For collection disputes, pursue levy release through CAP or bankruptcy protection in extreme cases (bankruptcy has complex tax exceptions—consult counsel).

Common mistakes to avoid

  • Missing deadlines or sending the wrong form or address.
  • Submitting disorganized or incomplete evidence.
  • Overrelying on emotion instead of law and documentation.
  • Failing to consider negotiated outcomes (installments, penalty abatement) that may cost less than litigation.

Real-world example (short)

A client faced a $30,000 assessment after an information-matching issue. We compiled bank deposits, customer receipts, and corrected 1099 records, then negotiated in Appeals. The IRS conceded the majority of the adjustment and reduced the assessment to $5,000 plus interest—saving the client time and litigation risk.

Professional disclaimer

This article provides general information and is not individualized tax advice. Tax law is fact-specific and changes over time. Consult a CPA, enrolled agent, or tax attorney before taking action on a particular case.

Authoritative sources

If you want a checklist or a template for a written protest or CDP request to use with Appeals, I can prepare one tailored to common small-business disputes (income, deductions, or penalty issues).