Why taxpayers use the IRS Appeals Conference
An IRS Appeals Conference is built to provide a fair, impartial forum for resolving disagreements between taxpayers and the IRS outside of litigation. Appeals officers are separate from the exam (audit) or collection teams that made the original determination. Their role is to weigh the law and the facts and, where appropriate, negotiate settlements that both the IRS and the taxpayer can accept (IRS, Appeals: https://www.irs.gov/appeals).
Using Appeals can save time, reduce out-of-pocket legal costs, and preserve options that would be lost or become more expensive later. In many cases I’ve seen in practice, a well-prepared appeals case leads to meaningful reductions in assessed tax or penalties and avoids the uncertainty and expense of court.
Who can use Appeals and what issues it covers
Most taxpayers—individuals, small businesses, and corporations—can seek an Appeals Conference after receiving certain IRS determinations. Appeals commonly handles:
- Audit adjustments (income, deductions, credits)
- Penalty determinations and penalty waivers
- Collection disputes (including certain Collection Due Process issues)
- Some partnership and business-classification disputes
Appeals will not handle criminal cases or matters expressly reserved for the courts. Deadlines and available remedies vary by notice type, so always read the notice and the Appeals instructions carefully (Taxpayer Advocate Service, https://www.taxpayeradvocate.irs.gov/).
Key differences vs. litigation (quick comparison)
- Cost: Appeals is generally much less expensive than litigation.
- Time: Appeals typically resolves cases in months; court can take years.
- Formality: Appeals is administrative and negotiation-focused; court is adversarial and precedent-driven.
- Outcomes: Appeals seeks compromise and correct application of the law; courts issue binding judgments.
For a deeper comparison of the options, see our guide: Tax Court vs Appeals Office: Where to Take Your Dispute (FinHelp: https://finhelp.io/glossary/tax-court-vs-appeals-office-where-to-take-your-dispute/).
Step-by-step: How the Appeals Conference process usually works
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Read the notice and follow directions. Notices from the IRS include specific appeal rights and deadlines. Deadlines vary by the notice type. For collection notices, you may have 30 days to request a Collection Due Process (CDP) hearing; other notices set different timeframes—confirm the deadline on your notice and act quickly.
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Request an appeals review. Follow the instructions on the notice or use the contact details provided. Your request can be written or, in some instances, made by phone, but written requests are safer and create a record.
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Prepare an appeals packet. Compile the evidence, a concise statement of the issues, and legal authority supporting your position. Many Appeals officers expect a focused, well-documented submission rather than a long, unfocused narrative. See our practical guide, How to Prepare a Strong Appeals Packet for the IRS Appeals Office (FinHelp: https://finhelp.io/glossary/how-to-prepare-a-strong-appeals-packet-for-the-irs-appeals-office/).
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Assignment of an Appeals officer. Appeals assigns a neutral officer who reviews the case and may request additional documents or ask clarifying questions.
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Conference format. Conferences can be conducted in writing, by phone, or in person. The Appeals officer will discuss the facts, the applicable law, and potential settlement options.
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Decision or settlement. The Appeals officer may propose a settlement, partially sustain the IRS position, or recommend other remedies. If you and the IRS agree, the case is closed by written agreement.
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Post-appeal options. If you cannot reach agreement, you retain the option to litigate in court (subject to statutory filing deadlines), or pursue other administrative remedies in some collection cases.
What to include in a persuasive appeals packet
A strong packet focuses on relevance and credibility. Key elements:
- A concise facts statement: timeline and point-by-point dispute of the IRS adjustments.
- Copies of primary evidence: receipts, bank statements, contracts, payroll reports. Originals are not required but retain them.
- Legal and administrative authority: brief citations to the Internal Revenue Code, Treasury regulations, or controlling cases where relevant.
- A clear request: state the relief you want (e.g., remove $X of income, abate penalties, accept a proposed adjustment).
- Contact information and a signed statement certifying accuracy.
If you plan to present complex valuation, accounting, or industry-practice issues, include expert reports or a summary of expert opinions. Our article Preparing for an IRS Appeals Conference Without a Lawyer (FinHelp: https://finhelp.io/glossary/preparing-for-an-irs-appeals-conference-without-a-lawyer/) walks through a practical evidence checklist for self-represented taxpayers.
Practical negotiation strategies (what I use in practice)
- Lead with the strongest facts. Appeals officers respond best to clear, verifiable evidence over rhetoric.
- Be realistic about outcomes. Appeals is a give-and-take process; prioritize the elements that matter most (tax, interest, penalties).
- Address penalties early. Penalties are often the easiest area for reduction or abatement if you can show reasonable cause or administrative error.
- Don’t bury your weaknesses. Acknowledge doubtful points and explain mitigating facts or why they are less significant.
- Offer alternatives. If exact resolution on a substantive legal point is uncertain, propose a compromise adjustment or a partial concession.
Timelines and deadlines — act promptly
Deadlines vary by notice. Common rules to remember:
- Collection notices and many levy-related letters often provide short windows (commonly 30 days) to request an administrative hearing or CDP. Missing those deadlines can limit appeals rights (see IRS Appeals guidance).
- A Notice of Deficiency (the “90-day letter”) requires a petition to the U.S. Tax Court within 90 days (150 if overseas) if you want to go to Tax Court; that is separate from filing an administrative appeal and has different consequences.
Because timing rules differ by notice and case type, read your notice and the Appeals instructions immediately and consider contacting a tax professional or the Taxpayer Advocate Service if you face hardship or confusion (Taxpayer Advocate Service: https://www.taxpayeradvocate.irs.gov/).
Outcomes you can expect
Common results from successful Appeals Conferences include:
- Full or partial abatement of assessed tax
- Reduction or removal of penalties
- Agreement on taxpayer-substantiated deductions or exclusions
- Stipulated settlements that preserve administrative appeal rights for similar future issues
If Appeals does not resolve the dispute, you may have court options. Consult our guide on where to take your dispute: Tax Court vs Appeals Office (FinHelp: https://finhelp.io/glossary/tax-court-vs-appeals-office-where-to-take-your-dispute/).
Common mistakes to avoid
- Waiting to prepare until the last minute. Appeals officers expect organized submissions; rushed packets weaken credibility.
- Confusing Appeals deadlines with Tax Court deadlines. Each has different timelines and rules.
- Using unsupported or hearsay evidence. Bring primary source documents wherever possible.
- Not considering settlement tradeoffs. Pursuing a small legal victory can be expensive compared with a negotiated compromise.
When to consider litigation instead of Appeals
Appeals is often the right first step, but litigation may be preferable when:
- You need a binding legal ruling on a novel or important legal issue.
- The amount in controversy justifies court costs and potential appeal.
- You think Appeals cannot be impartial because of specific factual or structural issues (rare).
Discuss strategy with counsel or a CPA; our article comparing litigation and administrative options can help you decide (FinHelp: https://finhelp.io/glossary/tax-court-vs-appeals-office-where-to-take-your-dispute/).
Real-world example (illustrative, anonymized)
A small-business client faced a $75,000 audit adjustment after an auditor disallowed a category of expenses as personal. We opened an Appeals case, provided contemporaneous bank statements, vendor invoices, and a short expert declaration tying the expenses to business activity. After a single conference and a modest additional exchange of documents, the Appeals officer agreed to reinstate two-thirds of the expenses, reducing the liability by roughly 65%. The client avoided court costs and months of litigation risk.
Practical next steps checklist
- Read your IRS notice immediately and note the appeal deadline.
- Assemble a focused appeals packet, emphasizing documentary proof and a concise legal argument.
- Consider professional representation for complex matters; a CPA or tax attorney can streamline evidence and negotiations.
- Stay responsive to Appeals officer requests and keep communications professional and timely.
Sources and further reading
- IRS, Office of Appeals: https://www.irs.gov/appeals
- Taxpayer Advocate Service: https://www.taxpayeradvocate.irs.gov/
- For practical, how-to articles on building your case: How to Prepare a Strong Appeals Packet for the IRS Appeals Office (FinHelp: https://finhelp.io/glossary/how-to-prepare-a-strong-appeals-packet-for-the-irs-appeals-office/)
- See also: Preparing for an IRS Appeals Conference Without a Lawyer (FinHelp: https://finhelp.io/glossary/preparing-for-an-irs-appeals-conference-without-a-lawyer/)
Professional disclaimer
This page is educational and not individualized legal or tax advice. IRS rules change and every fact pattern differs. Consult a qualified tax professional or attorney before making decisions about your specific case.
