An Appeals Conference is a crucial step in the IRS tax dispute process, providing taxpayers with an opportunity to resolve disagreements about audits, penalties, or collection actions without resorting to formal court proceedings. Functioning like a mediation, it involves a neutral IRS Appeals Officer who was not involved in the original audit reviewing the facts and law independently to help both sides reach an equitable settlement.
When Does an Appeals Conference Occur?
After an IRS audit, if the agency proposes changes resulting in additional tax liability, you typically receive a “30-day letter” (also called a Statutory Notice of Deficiency). This letter informs you of your right to contest the changes and request an Appeals Conference. You have 30 days to respond. If you disagree with the IRS findings, this conference serves as a critical chance to present your case.
How the Appeals Conference Process Works
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Receive the 30-Day Letter: This letter from the IRS outlines the proposed changes and your right to appeal.
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Submit a Protest Letter or Request: For cases with significant tax changes (usually above a threshold defined by IRS guidance), you must submit a formal written protest. This letter states your intent to appeal, specifies the disputed issues, provides facts and legal arguments supporting your position, and includes a signed statement under penalty of perjury.
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Conference Scheduling: Once your protest or request is received, the case transfers to the IRS Office of Appeals, which assigns an Appeals Officer who will contact you to arrange the meeting. Conferences can be in person, by phone, or video, depending on case complexity and preference.
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Present Your Case: During the conference, you or your representative explain your side, submit evidence, and clarify issues. The Appeals Officer considers your arguments, IRS positions, and the “hazards of litigation,” meaning the chances of winning if the dispute went to Tax Court.
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Reaching an Agreement: Ideally, the conference ends with a settlement that reflects a fair compromise. You will formalize this with a signed agreement, such as Form 870 (Waiver of Restrictions on Assessment and Collection of Deficiency in Tax).
If no agreement is reached, the Appeals Office issues a formal Notice of Deficiency, allowing you 90 days to petition the U.S. Tax Court.
Benefits of an Appeals Conference
- Avoids Court: Settling disputes informally saves time, money, and stress.
- Impartial Review: An independent Appeals Officer provides a fresh look at your case.
- Negotiated Outcomes: Consideration of litigation risks often results in favorable compromise.
- Final Resolution: Agreement ends the dispute without further proceedings.
Who Can Benefit?
Individual taxpayers, small businesses, and corporations can all use the Appeals process to resolve audits, penalties, liens, and collection disputes. If the IRS takes collection actions like liens or levies, you can also request a Collection Due Process hearing through the Appeals Office.
Tips for a Successful Conference
- Preparation is Key: Collect and organize all documentation supporting your position.
- Understand Your Dispute: Know the IRS issues, your rebuttals, and relevant tax laws.
- Consider Professional Representation: Tax attorneys, CPAs, or Enrolled Agents can present your case effectively.
- Maintain Professionalism: Stay respectful and reasonable to facilitate cooperation.
- Focus on Facts and Law: Base arguments on evidence and applicable statutes.
Common Pitfalls to Avoid
- Missing deadlines, especially responding to the 30-day letter.
- Being unprepared or lacking evidence.
- Confrontational behavior that impedes negotiations.
- Providing incomplete or misleading information.
FAQs
Do I need a lawyer? Not always, but professional help can improve your chances, particularly in complex disputes.
How long does it take? It varies from one meeting to multiple sessions over months.
What if no agreement? You can take your case to the U.S. Tax Court.
Can I appeal IRS collection actions? Yes, via the Collection Due Process hearing, detailed in the IRS appeals process.
For more detailed guidance, see our article on the IRS Appeals Process and learn about the Collection Due Process Hearing.
Comparison: IRS Appeals Conference vs. U.S. Tax Court
| Aspect | IRS Appeals Conference | U.S. Tax Court |
|---|---|---|
| Formality | Informal negotiation | Formal judicial process |
| Participants | Taxpayer, IRS Appeals Officer | Taxpayer, IRS attorney, Judge |
| Goal | Mutually agreeable settlement | Binding court decision |
| Cost | Lower, mainly professional fees | Higher, court and attorney fees |
| Timeline | Often resolved within months | Can take years |
| Outcome | Settlement or Notice of Deficiency | Court ruling, appeal possible |
| Public Record | Generally confidential | Public court records |
References
- Internal Revenue Service. “Appeals – Frequently Asked Questions.” Accessed 2025. https://www.irs.gov/appeals
- IRS Publication 5, Appeal Rights and How To Prepare a Protest If You Disagree (2024). https://www.irs.gov/pub/irs-pdf/p5.pdf
- FinHelp Glossary: IRS Appeals Process, Collection Due Process Hearing
This comprehensive overview ensures taxpayers understand how an Appeals Conference works, its benefits, and how to navigate the process effectively.