The Right to Appeal an IRS Decision in an Independent Forum

Taxpayers are entitled to a fair and impartial administrative appeal of most IRS decisions, including many penalties, and have the right to receive a written response regarding the Office of Appeals’ decision. Taxpayers generally have the right to take their cases to court.

What This Means for You

  • The Commissioner must ensure an independent IRS Office of Appeals that is separate from the IRS Office that initially reviewed your case. Generally, Appeals cannot discuss a case with the IRS unless you or your representative is given the opportunity to be present. RRA 98 § 1001(a)(4), Rev. Proc. 2012-18

    See IRS Publication 4227, Overview of the Appeals Process.

  • The IRS must ensure that an appeals officer is regularly available within each State.

    For more information on this provision, see the National Taxpayer Advocate’s 2014 Annual Report to Congress.

    Most Serious Problem: APPEALS: The IRS Lacks a Permanent Appeals Presence in 12 States and Puerto Rico, Thereby Making It Difficult for Some Taxpayers to Obtain Timely and Equitable Face-to-Face Hearings with an Appeals Officer or Settlement Officer in Each State

    Legislative Recommendation: ACCESS TO APPEALS: Require that Appeals Have At Least One Appeals Officer and Settlement Officer Located and Permanently Available within Every State, the District of Columbia, and Puerto Rico

  • If you do not agree with the proposed adjustment as a result of an examination (audit), you have the right to an administrative appeal. Statement of Procedural Rules, 26 C.F.R. § 601.103(b)

  • In certain situations, a taxpayer has the opportunity to request a conference with the Office of Appeals. Statement of Procedural Rules, 26 C.F.R. § 601.103(c)(1)

  • You have the right to request an independent review conducted by the Office of Appeals prior to the termination of your installment agreement. IRC § 6159(e)

  • If the IRS is proposing to adjust the amount of tax you owe, you will typically be sent a statutory notice of deficiency, which informs you of the proposed change. This notice provides you with a right to challenge the proposed adjustment in Tax Court without first paying the proposed adjustment. Thus, the statutory notice of deficiency is your ticket to Tax Court. IRC § 6212

    For more information about the United States Tax Court, see the Court’s taxpayer information page.

  • To exercise your right to challenge the proposed adjustment in Tax Court without first paying the proposed adjustment, you must file a petition with the Tax Court within 90 days of the date of the notice being sent (or 150 days if the taxpayer’s address on the notice is outside the United States or if the taxpayer is out of the country at the time the notice is mailed). IRC § 6213

    For more information about the United States Tax Court, see the Court’s taxpayer information page.

  • In certain circumstances, the Office of Appeals has exclusive authority to settle your case. Generally, for the four months after you petition Tax Court, Appeals will be the only office within the IRS who can settle your case as long as the statutory notice of deficiency or other notice of determination was not issued by Appeals. Statement of Procedural Rules, 26 C.F.R. § 601.106

  • Generally, you are entitled to request a Collection Due Process hearing to dispute the first proposed levy action relating to a particular tax liability. The independent IRS Appeals/Settlement Officer conducting your hearing must have no prior involvement with the taxes the IRS is attempting to collect. If you disagree with the hearing officer’s determination, you can challenge it in Tax Court. IRC § 6330

    For more information about the United States Tax Court, see the Court’s taxpayer information page.

  • If the IRS rejects your request for an offer in compromise asking the IRS to settle your tax debt for less than the amount owed, or a payment plan, called an installment agreement, then you may seek an independent review of the rejection with the IRS Office of Appeals. IRC § 6159(f) / IRC § 7122(e).

  • You can generally request that an issue you have not been able to resolve with the IRS examination or collection division be transferred to the Office of Appeals. For issues that are unresolved after working with Appeals, you may request non-binding mediation (where a neutral third party will help you try to reach a settlement) or binding arbitration (where you and the IRS will be bound by a third party’s decision). You may also request non-binding mediation or arbitration after unsuccessfully trying to enter into a closing agreement or offer in compromise. IRC § 7123

  • Generally, if you have fully paid the tax and your tax refund claim is denied or if no action is taken on the claim within six months, then you may file a refund suit in a United States District Court or the United States Court of Federal Claims. IRC § 7422

  • In very limited circumstances, you can ask a court to make a determination on certain tax issues prior to there being an actual dispute between you and the IRS. For example, a court may be able to determine whether an organization is tax-exempt or if a retirement plan is valid. IRC §§ 7428, 7476-7479

  • A jeopardy levy or assessment allows the IRS, in very limited circumstances, to bypass normal administrative safeguards and protections. For example, the IRS may issue a jeopardy levy if the IRS has knowledge that the taxpayer is fleeing the country. If the IRS makes such a jeopardy levy or assessment, you have the right to file a law suit and the court will determine whether the levy or assessment was reasonable under the circumstances and whether the amount is appropriate. IRC § 7429