Overview
The IRS Appeals Process is the independent administrative review that follows many IRS examinations and collection actions. Its goal is to resolve disputes fairly, efficiently, and impartially — often without going to court. Appeals officers are separate from the auditors and collection personnel who issued the original decision, and they evaluate both factual evidence and legal arguments to try to reach a resolution that is reasonable for the taxpayer and the government (IRS, Appeals: https://www.irs.gov/appeals).
In my work reviewing taxpayer cases and coaching clients through appeals, I’ve seen well-documented appeals reduce proposed assessments and penalties substantially. The difference usually comes down to timing, organization, and a focused written protest.
When can you use Appeals?
You can request an administrative appeal in several common situations:
- After an audit results in additional tax or disallowed deductions.
- Following certain collection actions (liens and levies) where you receive a Collection Due Process (CDP) or Notice of Intent; CDP gives a 30‑day right to request a hearing with Appeals.
- When you disagree with penalty assessments or abatements.
- For various other IRS determinations where the taxpayer has been given statutory or administrative appeal rights (see IRS Publication 556: Examination of Returns, Appeal Rights, and Claims for Refund: https://www.irs.gov/pub/irs-pdf/p556.pdf).
Note: The appeal path you choose affects deadlines and next steps — for example, a statutory notice of deficiency generally gives 90 days (150 if outside the U.S.) to petition the U.S. Tax Court instead of filing an administrative appeal (IRS notice rules). For collection matters, CDP and the Collection Appeal Program (CAP) have different protections and timelines.
Step-by-step: How Appeals typically works
- Identify the right appeal route and deadline
- Read the IRS letter or notice carefully. It usually tells you whether you have administrative appeal rights and how many days you have to request a conference. Collection notices commonly include CDP or CAP information and a 30‑day deadline. Audit deficiency notices specify rights and may allow either an administrative appeal or direct petition to Tax Court.
- Prepare and file your protest or request for conference
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Small case requests (for disputes at or below $50,000 per taxable year as of 2025) may follow a simplified process. For larger disputes you will usually submit a formal written protest. A persuasive protest clearly explains the facts, the law, the specific adjustments you disagree with, and the relief you seek.
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Essential elements of a formal written protest: taxpayer name and contact, taxpayer identification (SSN/ITIN/EIN), tax periods at issue, a statement of disagreement, facts and reasons with citations (if applicable), proposed adjustments, and signature and date. Attach supporting documents. (See sample and tips below and our interlinked guide on how to prepare a persuasive written protest.)
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Related internal resource: “How to Prepare a Persuasive Written Protest for an IRS Appeals Case” (https://finhelp.io/glossary/how-to-prepare-a-persuasive-written-protest-for-an-irs-appeals-case/).
- Appeals assignment and independent review
- An Appeals officer not involved in the original audit or collection reviews the case. They evaluate the evidence, may request additional documentation, and may ask both sides for legal analysis.
- Conference and negotiation
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Appeals conferences can be telephonic, virtual, or in person. The officer listens to the taxpayer (or representative), reviews documents, and may propose settlement options. Many cases settle at or near the Appeals stage through compromise, partial concession, or penalty reduction.
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For practical tips on preparing for a conference—even without an attorney—see our guide: “Preparing for an IRS Appeals Conference Without a Lawyer” (https://finhelp.io/glossary/preparing-for-an-irs-appeals-conference-without-a-lawyer/).
- Decision
- Appeals issues a written determination. If the appeal resolves the dispute, a closing agreement or settlement document will follow. If Appeals cannot resolve eligible issues, the taxpayer may have options to petition the U.S. Tax Court (often without paying the disputed tax) or to litigate in U.S. District Court or the Court of Federal Claims (usually only after paying the tax and then suing for refund).
Typical timelines
- Initial administrative review: commonly 30–180 days for many appeals, but complex or international cases can take 6–12 months or longer.
- Collection Due Process requests: statutory 30‑day deadlines to request a CDP hearing.
- Statutory Notice of Deficiency: 90 days to file in U.S. Tax Court (150 days if served outside the U.S.).
Timelines vary greatly. Track deadlines precisely and file extensions or requests promptly when allowed.
Evidence and documentation strategy (practical checklist)
A good appeals file is organized, concise, and evidence-focused. Include:
- A short executive summary (one page) that states your position and the relief you want.
- A timeline of key events (audits, notices, communications).
- The original tax return pages and amended returns, if any.
- Relevant contracts, invoices, receipts, bank records, and depreciation schedules.
- Third‑party statements or affidavits if needed to corroborate facts.
- A legal memo citing statutes, regulations, or cases if your argument rests on law.
- A clear index and tabulation so the Appeals officer can verify claims quickly.
In my practice, Appeals officers appreciate brevity and clarity: highlight the three strongest documents and summarize their relevance in the cover memo.
Common mistakes to avoid
- Missing the deadline: If you miss a statutory or administrative deadline, you may lose the right to appeal.
- Overwhelming with irrelevant documents: Include focused evidence. A 200‑page unindexed binder makes review harder, not easier.
- Treating Appeals like an adversarial courtroom: Appeals officers are evaluators. Present facts honestly; concede immaterial points to preserve credibility on key issues.
- Failing to explain the numbers: Show math and link each claimed deduction or adjustment to source documentation.
What if you lose the administrative appeal?
If Appeals issues an unfavorable determination, options depend on the case type:
- Tax Court petition: If you received a statutory notice of deficiency, you generally have 90 days to file a petition in U.S. Tax Court (150 days if outside the U.S.). The Tax Court lets you litigate without paying the disputed assessment first. (U.S. Tax Court: https://www.ustaxcourt.gov/)
- Refund suit in District Court or Court of Federal Claims: Typically available only after you pay the tax and then file a refund suit.
Choosing the next step benefits from counsel; court litigation shifts the burden of proof and introduces procedural rules not present in Appeals.
Penalties and collections — special considerations
Many penalties (accuracy penalties, failure to file/pay) can be contested during Appeals. For collections (liens, levies), the CDP process protects certain rights and can lead to installment agreements, offers in compromise, or lien withdrawals. Appeals can also consider reasonable cause for penalty abatement.
If the dispute involves collection actions, check whether you qualify for Collection Due Process or the Collection Appeals Program and file within the stated deadline (IRS notices explain your options and timelines).
Practical advice and negotiation tips
- Start with a clear, prioritized list of issues. Ask Appeals to rule on the dispositive legal question first if resolving that would end the case.
- Consider early settlement positions that leave room to negotiate—don’t start at your best offer.
- Use experts (accountants, valuation specialists) for complex valuation or business‑income disputes.
- Keep records of every call and mail exchange; include names, dates, and brief notes.
Examples from practice
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Small-business owner: disputes over claimed business expenses were reduced by presenting ledgers, vendor invoices, and contemporaneous mileage logs. Appeals accepted detailed contemporaneous records even though the original audit relied on estimates.
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Penalty reduction: a taxpayer facing heavy late‑filing and late‑payment penalties obtained a 50% penalty reduction after documenting medical emergencies and showing attempts to file before due dates were missed.
These examples mirror common outcomes: Appeals values credible evidence and reasonable explanations.
Related resources on FinHelp
- Read our step‑by‑step filing guide: “Tax Appeals: How to File and Succeed in an IRS Appeal” (https://finhelp.io/glossary/tax-appeals-how-to-file-and-succeed-in-an-irs-appeal/).
- Preparing for an appeals conference without a lawyer: “Preparing for an IRS Appeals Conference Without a Lawyer” (https://finhelp.io/glossary/preparing-for-an-irs-appeals-conference-without-a-lawyer/).
- For written protest templates and structure: “How to Prepare a Persuasive Written Protest for an IRS Appeals Case” (https://finhelp.io/glossary/how-to-prepare-a-persuasive-written-protest-for-an-irs-appeals-case/).
Final checklist before you submit an appeal
- Confirm which appeal path applies and the exact deadline on the IRS notice.
- Draft a one‑page summary and a short, organized evidence packet.
- File the protest or CDP request timely and keep proof of mailing or e‑filing.
- Prepare for the conference with 3–5 talking points and the documents that prove them.
- Decide in advance who will represent you (self, CPA, EA, or attorney) and complete Form 2848 Power of Attorney if required.
Disclaimer
This article is for educational purposes and reflects general best practices and experience-based observations. It is not legal or tax advice for a specific situation. Consult a qualified tax professional or attorney to discuss how the IRS Appeals Process applies to your facts and to receive representation where appropriate.
Authoritative sources
- IRS, Office of 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/
(Links last verified in 2025.)
