Overview

Appeals officers in the IRS Office of Appeals handle disputed audit and collection issues outside of litigation. Their job is not to re-audit but to reach a fair administrative resolution by weighing the taxpayer’s documentation, the IRS examiner’s work papers, and applicable law or policy (IRS Office of Appeals: https://www.irs.gov/about-irs/office-of-appeals).

What appeals officers focus on

  • Accuracy and arithmetic: Basic math, totals, and reconciliations must be correct.
  • Consistency across records: Tax returns, bank statements, ledgers, and schedules should tell the same story.
  • Substantiation: Receipts, invoices, canceled checks, vendor statements, and third‑party records (e.g., Form W‑2, 1099s) that corroborate reported amounts.
  • Source documentation vs. summaries: Summaries are useful, but appeals officers expect supporting source documents for key items.
  • Timing and plausibility: Dates, frequency, and dollar amounts should fit the taxpayer’s business pattern and industry norms.
  • Ability to pay and collection issues: In collection-related appeals, financial statements are evaluated for current and projected ability to pay.

Documents to prepare and submit

  • A one-page summary that highlights contested items and your conclusion.
  • Reconciled bank statements and trial balance or profit & loss showing how figures tie to the return.
  • Receipts, invoices, mileage logs, canceled checks, credit-card statements, and payroll records.
  • Third-party documents (1099s, W‑2s, vendor statements) and reconciliations explaining differences.

How officers evaluate adjustments

Appeals officers compare the taxpayer’s records to the IRS examiner’s adjustments. They will:

  • Recompute key calculations and test samples when numbers are large or complex.
  • Look for corroboration from independent sources (banks, employers, customers).
  • Consider the taxpayer’s credibility and the thoroughness of documentation.
  • Apply legal standards or Appeals settlement guidelines when closing cases.

Practical tips from practice

In my 15 years working with taxpayers, I’ve found the following materially helps results:

  • Lead with a clear summary and reconcile contested numbers to bank or accounting records.
  • Label and paginate exhibits; use a table of contents so officers can quickly find supporting docs.
  • Provide contemporaneous source documents rather than post‑event reconstructions.
  • If numbers are estimates (e.g., cash sales), explain your methodology and show how it compares to historical trends.
  • Use a CPA or tax representative for technical disputes—see Using Experts and Professionals Effectively in Tax Appeals for when an expert adds value (https://finhelp.io/glossary/using-experts-and-professionals-effectively-in-tax-appeals/).

Common mistakes to avoid

  • Submitting only summaries without source documents.
  • Failing to reconcile bank deposits to reported income.
  • Presenting late, unorganized packets that make it hard to verify key claims.

Timeline and next steps

Appeals work is fact- and complexity-driven; many cases resolve in months, but complex matters can take a year or longer. Appeals officers may request additional information, propose a conference, or issue a closing memo with settlement recommendations (IRS Appeals information: https://www.irs.gov/about-irs/office-of-appeals).

Related resources

Professional disclaimer

This article is educational and does not replace personalized tax advice. For guidance specific to your case, consult a qualified tax professional or attorney. Official IRS guidance on appeals and recordkeeping can be found at https://www.irs.gov/about-irs/office-of-appeals and https://www.irs.gov/businesses/small-businesses-self-employed/recordkeeping.

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