Facing an IRS decision you disagree with can feel overwhelming. But you’re not powerless. The IRS Independent Office of Appeals provides a structured way to resolve tax disputes without going to court.
If you’ve received an audit adjustment, a penalty notice, or a collection action in New York, understanding your appeal rights can make the difference between accepting an unfavorable decision and finding a fair resolution.
The bottom line: You have 30 days from most IRS notices to request an appeal. Acting quickly with proper documentation gives you the best chance of success.
Understanding Your Right to Appeal
The IRS Independent Office of Appeals operates separately from the office that made the initial determination. This independence ensures you get an impartial review of your case.
The office was established in 1927 with a simple mission: resolve federal tax controversies without litigation in a way that’s fair to both the government and taxpayers.
According to the IRS Data Book, the Appeals unit resolved 65,573 cases in fiscal year 2024, helping taxpayers avoid costly and time-consuming litigation.
What Decisions Can You Appeal?
You can appeal most IRS decisions, including:
- Audit findings and proposed tax adjustments
- Penalties for late filing or underpayment
- Collection actions like liens and levies
- Rejected offers in compromise
- Denied installment agreement requests
- Proposed termination of existing payment plans
- Rejected innocent spouse relief claims
- Trust fund recovery penalties.
Grounds for Successful Appeals
Appeals officers consider several factors when reviewing your case. Understanding what makes a strong appeal helps you prepare.
Reasonable Cause for Penalty Abatement
The IRS may remove or reduce penalties if you can show reasonable cause. This means you exercised ordinary prudence and business care but still couldn’t comply with tax obligations.
Valid reasons include:
- Natural disasters that directly impacted your ability to file or pay
- Serious illness or death in your immediate family
- Unavoidable absence from your business
- Inability to obtain necessary records despite reasonable efforts
- Reliance on incorrect written advice from the IRS
- Circumstances beyond your control.
For penalties, you can also request first-time penalty abatement if you have a clean compliance history for the past three years.
Procedural Errors
If the IRS didn’t follow proper procedures, you may win your appeal. Examples include:
- Failure to provide required notices
- Not allowing sufficient time to respond
- Improper calculation of tax or penalties
- Failure to consider the evidence you submitted.
Factual Disputes
You can challenge the IRS’s factual findings. Bring documentation that supports your position:
- Bank statements and canceled checks
- Receipts and invoices
- Contracts and agreements
- Contemporaneous records
- Expert opinions
- Witness statements.
Legal Arguments
Sometimes the law supports your position. You might argue:
- The IRS misapplied the tax code
- A different interpretation of the law is correct
- Case law supports your position
- Regulations weren’t properly followed.
What You Can’t Appeal
Not every issue can be raised in an appeals conference. You can’t challenge:
- Issues already decided in a previous hearing where you participated meaningfully
- The underlying tax liability, if you had a prior opportunity to dispute it
- Frivolous positions identified in IRC Section 6702
- Issues where there’s been a final determination in Tax Court.
The Two Main Appeal Processes
Collection Appeals Program (CAP)
The Collection Appeals Program handles disputes about specific collection actions. It’s faster than other appeal processes and resolves issues quickly. You can use CAP if you’re dealing with:
- A notice of federal tax lien that’s been filed or proposed
- Levy actions on your property or wages
- A rejected or terminated installment agreement
- Seizure of your property
- Denial of currently not collectible status.
CAP doesn’t require you to speak with a Collection manager first if the issue involves a rejected, modified, or terminated installment agreement. For other issues, you must first discuss your case with a manager before filing Form 9423 (Collection Appeals Request). You have just three business days after meeting with the Collection manager to submit your appeal.
Important limitation: If you disagree with the Appeals decision at a CAP hearing, you can’t take the case to court. That’s why CAP works best for straightforward collection disputes.
Collection Due Process (CDP) Hearings
CDP hearings give you more rights than CAP. These hearings apply when you receive specific notices about liens or levies.
Under IRC Sections 6320 and 6330, you have the right to a CDP hearing if the revenue service sends you any of the following:
- Notice of Federal Tax Lien Filing and Your Right to a Hearing
- Final Notice of Intent to Levy and Notice of Your Right to a Hearing
- Notice of Levy on Your State Tax Refund
- Notice of Jeopardy Levy and Right of Appeal.
You have 30 days from the notice date to request a CDP hearing. Use Form 12153 (Request for a Collection Due Process or Equivalent Hearing).
The big advantage of CDP is that if you request a hearing on time, the IRS generally can’t levy your property while your appeal is pending. And if you disagree with the Appeals decision, you can petition the Tax Court for review within 30 days.
If you miss the 30-day deadline for a CDP hearing, you can still request an “Equivalent Hearing” within one year of the CDP notice date. You’ll get a hearing with Appeals, but you lose two important rights:
- Levy actions won’t be suspended during your appeal.
- You can’t seek judicial review in Tax Court if you disagree.
How to Appeal an Audit or Examination
When the IRS proposes changes after an audit, you’ll receive a letter explaining the proposed adjustments. This letter includes instructions for requesting an Appeals conference. The process depends on how much money is at stake.
Small Case Request (Under $25,000)
If all the tax, penalties, and interest for each tax period sum up to $25,000 or less, you can file a small case request. Keep it simple: send a brief written statement that explains
- You want an Appeals conference
- Which changes you disagree with
- Why you disagree.
Send your request to the IRS address shown on your notice within 30 days.
Formal Written Protest (Over $25,000)
For larger amounts or when any tax period exceeds $25,000, you need a formal written protest. Your protest must include:
- A statement that you want to appeal to Appeals
- Your name, address, and taxpayer identification number
- The date and symbols on the IRS letter
- The tax periods or years involved
- A list of each proposed change you disagree with
- Your reasons for disagreement with each item
- The facts supporting your position
- The law or authority supporting your position
- Your signature with a penalty of perjury statement.
The perjury statement should read: “Under the penalties of perjury, I declare that I examined the facts stated in this protest, including any accompanying documents, and, to the best of my knowledge and belief, they are true, correct, and complete.”
What Happens During the Appeals Process
After you submit your appeal, the IRS office that made the initial determination reviews your protest. They’ll try to resolve the issues. If they can’t, they forward your case to Appeals.
Appeals will assign your case to an Appeals officer who had no prior involvement with your tax matter. This impartiality is crucial for a fair hearing.
You can attend your conference in person, by phone, or through correspondence. Most conferences are informal. You don’t need a lawyer, but you can bring one. You can also bring a CPA, enrolled agent, or other authorized representative.
The Appeals officer will:
- Review all the facts and evidence you provide
- Consider applicable tax law
- Verify that the IRS followed proper procedures
- Determine whether the proposed action balances efficient tax collection with your legitimate concerns
- Issue a written determination.
According to the IRS Focus Guide for fiscal year 2024, Appeals is working to reduce resolution times through digital platforms and modernization efforts. The office now includes secure messaging information in letters to taxpayers for more convenient communication.
Timeline and What to Expect
The appeals process takes time. Here’s a general timeline:
- For CAP appeals: Resolution often happens within 30 to 60 days if your request is straightforward.
- For CDP hearings: The IRS typically responds within 30 days of your request. The actual hearing may occur 60 to 120 days after your initial request, depending on case complexity and the Appeals’ workload.
- For audit appeals: Simple cases may resolve in three to six months. Complex cases can take a year or more.
Don’t wait until the last minute. The 30-day deadline is firm for most appeals. Missing it can cost you important rights.
When Appeals Don’t Resolve Your Case
If Appeals doesn’t resolve your dispute favorably, you still have options:
Tax Court
For CDP cases where you had a timely hearing, you can petition the Tax Court within 30 days of the Appeals determination. Tax Court lets you challenge the IRS without paying the tax first.
District Court or Claims Court
If you’ve paid the tax, you can sue for a refund in federal District Court or the Court of Federal Claims. You must file within two years of paying the tax.
Offer in Compromise
If you can’t afford to pay what the IRS says you owe, an offer in compromise might work. This settles your tax debt for less than the full amount. It’s a separate process from appeals but can be pursued if an appeal doesn’t succeed.
Currently Not Collectible Status
If paying any amount would create financial hardship, you can request a currently not collectible status. The IRS temporarily stops collection efforts. This status doesn’t eliminate your debt, but it gives you breathing room.
Attorney John D’Amato helps clients explore all these options. We don’t give up when appeals don’t go your way. We find the next best solution.
New York-Specific Considerations
While IRS appeals follow federal procedures regardless of where you live, New York taxpayers face unique considerations:
State Tax Issues
If your federal appeal involves income reporting, basis calculations, or other issues that affect both federal and state taxes, a federal adjustment usually means a New York State adjustment, too. You may need to file an amended New York return or address issues with the New York State Department of Taxation and Finance separately.
Statute of Limitations
New York’s statute of limitations for tax assessment is generally three years, similar to federal law. But the IRS and New York State calculate deadlines differently in some situations. Understanding both timelines protects you from unexpected assessments.
Preparing for Your Appeal
Success in appeals often comes down to preparation. Here’s how to get ready:
Gather Your Documents
Collect everything related to your case:
- All IRS notices and letters
- Your original tax returns for the years at issue
- Supporting documents (receipts, bank statements, contracts)
- Correspondence with the IRS
- Notes from any phone calls with IRS employees
- Previous appeals or audit results if relevant.
Organize Your Arguments
Write out why you disagree with the IRS determination. Be specific. Point out exact documents or law sections that support your position.
Calculate the Numbers
Know exactly how much is at stake. Include tax, penalties, and interest. Understand how the IRS calculated each amount. If you believe the calculation is wrong, prepare your own calculation.
Consider Settlement
Appeals officers can settle cases. If you’re partially right and the IRS is partially right, compromise might make sense. Think about what settlement terms you would accept before your conference.
Prepare Questions
Write down questions for the Appeals officer. Ask about anything you don’t understand. Appeals conferences are your opportunity to get clarity.
The Importance of Professional Representation
Tax law is complex. IRS procedures are technical. And the stakes are high.
At John D’Amato, PLLC, we bring years of experience helping New York clients navigate IRS appeals. Head attorney John D’Amato understands both federal tax law and how the Appeals office operates. He’s successfully represented clients in audit appeals, penalty abatement cases, and collection disputes.
Our approach focuses on:
- Thorough case analysis before filing any appeal
- Strong documentation to support your position
- Clear presentation of legal arguments
- Strategic negotiation with Appeals officers
- Protecting your rights throughout the process.
We’ve helped clients reduce tax assessments, eliminate penalties, and reach favorable payment arrangements. Our track record speaks for itself.
Take Action Now. Call John D’Amato for IRS Appeal Help.
IRS deadlines don’t wait. The clock starts ticking the day you receive an IRS notice. Waiting even a few days can limit your options.
John D’Amato is ready to help. As a top-rated tax attorney in New York, John D’Amato has the experience and knowledge to handle your IRS appeal. Our team has secured favorable outcomes for countless clients facing audits, penalties, and collection actions.
We are thorough, efficient, and easy to work with. We respond quickly to questions. We explain complex tax matters in plain language. And we fight for your rights.
Don’t face the IRS alone. Call (716) 703-9099 today for a consultation. We’ll review your situation, explain your options, and develop a strategy to resolve your tax dispute.
Your financial future is too important to leave to chance. Let John D’Amato guide you through the appeals process and fight for the best possible outcome.
Time is critical. Contact us today.