Getting an IRS audit letter is a terrifying experience for many taxpayers. IRS audits can involve visits to an IRS office or visits from revenue officers to your home or business. An assessment may result in back taxes and penalties.
Fortunately, you can appeal an IRS audit if you disagree with the results. This blog discusses how to appeal an IRS tax audit and tips for winning an appeal.
How Much Time Do You Have to Appeal an IRS Tax Audit?
You have 30 days from when you received the IRS official audit findings letter to appeal. Failure to file an IRS audit appeal within the provided timeframe complicates the entire process. Although you can still appeal the audit findings after the 30-day letter deadline, there is no guarantee the IRS will agree to your request.
How Do You Start an IRS Audit Appeal?
The IRS has a separate branch of service referred to as the Office of Appeals, operated by appeals officers with legal and/or accounting backgrounds. The primary function of these officers is to review completed tax examination reports and provide an impartial platform for taxpayers to argue their appeals to a higher power within the agency. They strive to resolve tax disputes internally to avoid lengthy litigation.
The Office of Appeals listens to your reasons for disagreeing with an audit and decides whether to uphold the audit findings or review them.
The following are the typical steps to start an IRS audit appeal:
- Don’t Sign or Return a Copy of The Examination Report: Once the audit is completed, the IRS will mail an examination report detailing the proposed adjustments, including the additional taxes, penalties, and interest. If you fail to sign and return your copy of the report, the IRS sends a 30-day letter explaining how to appeal the audit.
- File Official Protest: Once you receive the 30-day audit letter from the IRS, file an official protest within 30 days from the date on the letter.
What Should I Do If I Miss the Tax Audit Appeal Deadline?
If you fail to file your audit protest before the appeal deadline, you can request a 30-day or 60-day extension. As mentioned earlier, the IRS is not obligated to grant your appeal extension request, although they do in many cases.
What Documents and Information Do You Need for an Audit Appeal Hearing?
The IRS requires a horde of information you must include in your formal audit protest.
These include:
- Provide personal details, including name, address, and daytime phone number.
- Write a statement of appeals indicating you want to appeal the IRS findings with the Office of Appeals.
- Provide a copy of the IRS audit letter showing the proposed changes.
- Submit a list of each audit item you disagree with and the reason(s) why.
- Include documentation to support each of your reasons.
- Cite the law or authority (when applicable) that also supports your appeal for each item.
How Long Does the IRS Tax Audit Appeal Process Take?
The type of appeal determines how long the IRS appeal takes and the method you use to appeal.
The following are the general audit appeal timelines:
- Collection Due Process Hearing Appeals: 59 days to reach IRS appeals plus 252 more days for an IRS decision.
- Regular Audits: 105 days to reach appeals plus 337 more days for an IRS decision.
- Large Case Audits: 108 days to reach appeals plus 637 more days for an IRS decision.
- Penalty Fines: 100 days to reach appeals plus 220 more days for an IRS decision.
- Compromise Appeals: 61 days to reach appeals plus 240 more days for an IRS decision.
What are the Pros and Cons of IRS Audit Appeals?
The following are the pros and cons of an IRS audit appeal:
Pros
- The entire appeals process is free. However, you may need to cover fees if you hire a tax attorney.
- It can provide considerable savings if your appeal is successful. Appeals can reduce or eliminate taxes and penalties assessed earlier.
- Appealing can delay your tax audit bill for several months to give you additional time to consider payment options.
Cons
- The Appeals Office can discover tax issues the auditor missed. If you are certain the auditor missed some items that could result in a higher tax liability, forego the appeal. In such a scenario, consider filing your case in a tax court instead.
- As you wait for your appeals to be resolved, the interest on your tax bill will continue to grow.
Are the Odds of Winning an IRS Tax Audit Appeal Good?
The odds of winning an IRS tax audit appeal are good. IRS reveals in recent years, over 80% of appeals were resolved in a manner acceptable to both parties. Usually, the average appeal results in a 40% decrease in taxes, penalties, and interest assessed by the auditor.
IRS tax appeals can be a tedious and time-consuming process. Hiring a tax attorney or professional to manage the complex aspects of your audit appeal can be beneficial.
How Can Wiztax Help?
We can help with complicated tax codes to argue your appeal with the most complete and accurate information that helps ensure a favorable outcome with the IRS.
Call us today at (866) 568-4593 to learn more about how we can help with your IRS audit appeal.
Or start here to take our free online evaluation.
6 Simple Questions. Free Evaluation.
Join our Newsletter
Enter your email address to join our free newsletter. Get all the latest news and updates.