Introduction

Appealing an IRS audit decision is an administrative process that asks an independent IRS Appeals officer to review the examiner’s findings. Unlike litigation, the Office of Appeals exists to resolve disputes without court involvement. In my practice working with individuals and small businesses, a well-organized, timely appeal and clear documentation are often the difference between a partial concession and a costly, protracted dispute. This guide gives a practical, step-by-step road map, references authoritative IRS sources, and links to additional FinHelp resources that will help you prepare.

Why appeal? When should you consider it

  • You disagree with the facts, legal interpretation, or proposed adjustments in the audit report.
  • You believe procedural errors occurred during the audit (e.g., improper examination scope, missing evidence considered).
  • The proposed tax, penalties, or interest are more than you can reasonably accept without review.

If any of the above apply, the Office of Appeals is the appropriate next step before paying and pursuing a refund suit or going to Tax Court.

Authoritative references

Step-by-step administrative process

1) Read the notice carefully and identify the deadline

Most IRS notices include explicit instructions and a deadline for requesting an appeal or taking other action. Many examination reports direct you to request Appeals consideration — commonly within 30 days — but timing varies by notice type. If you received a Notice of Deficiency (the so-called “90-day letter”), you have 90 days (150 if you’re outside the U.S.) to file a petition with the U.S. Tax Court instead of an administrative appeal (IRS Publication 556).

Action: Follow the deadline printed on your notice. If you need clarification, contact the phone number on the notice immediately and ask how to preserve appeal rights.

2) Decide how to request Appeals review

  • Informal request: For smaller, straightforward cases the notice or the examiner may provide a simple way to request Appeals consideration by letter or through the examiner’s manager.
  • Written protest: For larger or complex disputes (usually when the proposed tax change exceeds a specified threshold), you’ll need a written protest. This is a concise legal and factual document explaining your position and the relief you seek. Publication 556 and the Appeals page describe required elements of a written protest.

What to include in a written protest (key elements)

  • Taxpayer identity and tax period under appeal.
  • A clear statement of disagreement and the exact items you contest.
  • Facts, legal arguments, and citations that support your position.
  • The dollar amount in dispute and the computation of your figures.
  • A signature from the taxpayer or authorized representative.

3) Assemble a focused evidence packet

Organization and relevance matter. Appeals officers appreciate concise, well-labeled evidence packages. Include:

  • A cover letter summarizing the issue(s) and desired outcome.
  • Copies of the audit report, IRS notices, and any prior correspondence.
  • Clear, chronological documentation: receipts, invoices, bank statements, contracts, mileage logs, canceled checks.
  • Expert reports, appraisals, or signed affidavits when appropriate.
  • A one-page chronology or summary that ties the evidence to each disputed item.

Tip from practice: I prepare a one-page “issue map” that lists each disputed item, the examiner’s position, my evidence, and the legal basis. It saves time in conferences and frames the discussion.

(See FinHelp’s checklist for preparing an audit response packet for more detail: Preparing a Concise Audit Response Packet: Checklist of Documents.)

4) Consider professional representation

A qualified CPA, EA, or tax attorney with Appeals experience will draft a persuasive written protest, compile evidence, and negotiate effectively. Representation isn’t required, but an experienced advocate often avoids common procedural missteps and improves outcomes.

5) File your request and confirm receipt

Send your request via the method specified on the notice (certified mail or via the exams unit). Keep proof of delivery and follow up if you don’t receive an acknowledgement within a reasonable time.

6) Prepare for the Appeals conference

The appeals conference may be in person, by phone, or even paper-only. Expect a reasonable, problem-solving tone: Appeals officers are independent and focus on hazards of litigation — not merely defending the examiner.

How to approach the conference:

  • Restate your strongest points quickly. Start with the most persuasive evidence.
  • Be honest and organized. If an item is weaker, acknowledge the limits and propose a reasonable compromise.
  • Discuss alternative resolutions: agreeing to a concession on a portion of an item, offsetting with an acceptable deduction, or proposing penalty abatement based on reasonable cause.

7) Possible outcomes and next steps

  • Full agreement: The IRS accepts your position; examiner adjustments are reversed.
  • Partial agreement: A compromise reduces the proposed tax, penalties, or interest.
  • No agreement: Appeals issues a closing letter. You still have other options:
  • If you received a Notice of Deficiency, you can file a petition in U.S. Tax Court within the deadline.
  • If the case concerns proposed collection action and you were denied relief, you may pursue a Collection Due Process (CDP) appeal or seek court review.
  • Pay the tax and file a claim for refund in U.S. District Court or the U.S. Court of Federal Claims (riskier and often slower).

Common timelines: Appeals aims to resolve many disputes within a few months, but complex cases can take six months or longer depending on volume and negotiation complexity.

Practical strategies that work

  • Prioritize documentation that directly rebuts the examiner’s adjustment. Secondary documents add context but don’t substitute for primary evidence.
  • Use concessions strategically: offering a narrow, documented concession can build credibility and lead to better compromises elsewhere.
  • Keep communications written when possible. Summaries create a paper trail and reduce misunderstandings.

Common mistakes to avoid

  • Missing the deadline. Missed appeals deadlines often foreclose administrative relief and force court action.
  • Sending an unorganized or overly long document dump. Appeals officers want clarity — not pages of irrelevant files.
  • Failing to show the math. Always present clear computations that connect your evidence to the numbers.

Special situations to know

  • Penalties and reasonable cause: Appeals has authority to abate penalties when reasonable cause exists. Explain the facts, provide supporting documents, and request abatement explicitly.
  • Collection actions (levies, liens): If the audit leads to collection, different appeal routes (like CDP) and immediate stay protections may apply — address these urgently.
  • Small cases/summaries: Some minor disputes can be handled through simplified procedures. Check the Appeals page or ask the examiner about small case options.

Where to go next (FinHelp links and further reading)

  • For timing and deciding whether to appeal, see our decision guide: When to Appeal an IRS Audit Determination: A Decision Guide.
  • For assembling your evidence packet, review: Preparing a Concise Audit Response Packet: Checklist of Documents.
  • If you want a broader primer on audits and what to expect, read: Understanding IRS Audits: Types, Process, and Outcomes.

Final notes and professional disclaimer

Appeals is an underused tool that often leads to fairer, faster results than court litigation. Staying organized, meeting deadlines, and presenting a focused written protest with clear evidence improves outcomes. In my practice, early engagement with Appeals and offering creative, documented resolutions frequently reduces proposed liabilities.

This article is educational and does not constitute legal or tax advice for your specific situation. For personalized guidance, consult a qualified tax practitioner or attorney experienced with IRS examinations and Appeals (IRS Office of Appeals: https://www.irs.gov/appeals).