Get the information and advice that you need about the tax appeals process, pitfalls to avoid and winning strategies from The Tax Lawyer, William D Hartsock.
Tax Appeal Information & Advice From The Tax Lawyer
If you have reached the tax appeals stage and you are considering making a settlement offer to the Tax Appeals officer, there are certain things to keep in mind. As a general rule, Tax Appeals officers will give serious consideration to any good-faith attempt to settle the matter. A nuisance-value offer will simply be ignored. If you make a good-faith offer that the Tax Appeals officer believes is unacceptable, they may counteroffer or describe some other basis upon which your settlement offer might be accepted.
Once you have decided that filing a written protest in tax appeals is the correct strategy for addressing your dispute with the IRS, you must then prepare the written protest itself.
Tax Appeals conferences are typically rather informal. There is generally no stenographer present to record the issues of fact and tax law discussed, unless specifically requested by the taxpayer via specific procedures. When you or others provide testimony during the tax appeals conference , it is not under oath; however, matters of fact must be stated on a signed affidavit under penalty of perjury (1).
The Tax appeals Conference is generally an informal affair. However, despite the informality, it is worth noting that the judge presiding over the tax appeals conference is technically an adversary to the taxpayer who argues the IRS’s position.
When you have a disagreement with the IRS over the amount of tax you owe, you may need to enter into negotiations with the Office of Appeals. The Office of Appeals is in charge of administrative dispute resolution with the IRS.
A taxpayer who wishes to obtain a refund from the IRS for overpayment of taxes cannot do so unless the written refund claim is filed with the IRS within the proper time period. In general, this means that the refund claim must be filed within three years from the time that the tax return was initially filed, or two years from the time the tax was actually paid, whichever is later (1).
Sometimes, a taxpayer’s case may involve issues that will impact the taxpayer for years to come. Thus, an agreement with the Tax Appeals Office can affect the taxpayer’s tax return for the current year, future years, as well as related issues on those tax returns. For this reason, it may be beneficial to both parties if consistent action is taken on both related issues.
When you finally come to an agreement with the Tax Appeals Officer to settle your case, the settlement should be recorded on a particular type of written form. In general, the IRS uses one of four forms for cases settled in Tax Appeals:
At the end of the Tax Appeals process, many taxpayers wonder if they will be able to recoup certain costs incurred in dealing with the IRS. Although it may not be easy, it is actually possible to obtain administrative costs, including attorney’s fees, following an Tax Appeals process. By filing a well-timed administrative claim for administrative costs or a “qualified offer,” the taxpayer may be able to do so.
Each region of the United States has specific IRS offices, and within each IRS region are special IRS Appeals Offices. As a general matter, the Tax Appeals offices have jurisdiction over income, estate, gift, employment, and certain excise taxes. The Appeals offices also have the power to assess additions to tax, including additional amounts, penalties, and interest. The jurisdiction of the Appeals office only applies once the taxpayer has filed a protest requesting consideration by Appeals.