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What to Expect at a Tax Appeals Conference

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). If you have evidence to support your position, you must disclose it prior to the appeals conference through your signed affidavit. You cannot simply wait until the appeals conference to present your evidence to the appeals officer for the first time. If you attempt to do so, the Appeals officer can decide to return the entire case back to the local office for verification of the evidence.

When you reach the Appeals conference, the Appeals officer may ask you to provide additional information over and above what you already included in your signed factual affidavit. If you have a very complex case, there might be a series of conferences instead of just one. In more simple cases, a settlement can be resolved in only one session. The number and length of the conferences simply depends on the complexity of the taxpayer’s situation. At some point during the Appeals conference(s), the topic of settlement will be reached. If the Appeals officer believes that the dispute is appropriate for settlement, the Appeals officer typically ask the taxpayer or the taxpayer’s representative to submit a settlement officer.

If your case settles during the Appeals conference, you will receive a letter detailing the computations involved in the amount of your settlement, the settlement agreement form, and the a bill for the agreed-upon deficiency. If your case does not settle, the Appeals officer drafts a memorandum describing the offer that was made and the Appeals officer’s settlement range (2). The Appeals Officer will then send a statutory notice of deficiency to the taxpayer, which may be reviewed by the representative.

The Appeals Process in a Nondocketed Case

A nondocketed case is one in which the taxpayer proceeds directly to appeals without first filing a suit in the Tax Court. When the taxpayer files his or her written protest, that file is transmitted to the Appeals Office. The file should contain the taxpayer’s written protest, tax returns, consents, the revenue agent’s reports, and other documents related to the taxpayer’s liability. At this point, the Appeals Office must review the taxpayer’s protest and file and may also consider any new facts and law to determine whether the case is truly appropriate for appellate review. In the majority of cases, the Appeals Office will take the case on appeals and will not return it back to the local revenue office for additional development.

Once the petition is filed, the Appeals Office will examine the statutory period of limitations to determine whether it has expired, or how much more remains of the statute of limitations for you to go though the tax appeals process. Under the Internal Revenue Manual, a case should not be transmitted to the Appeals Office unless at least 180 days remain before the statutory period of assessment expires (3). If there is not enough time for the Appeals assessment to take place, the taxpayer has the ability to request for an extension of the assessment period. Using a Form 872 (Consent to Extend the Time to Assess Tax), the statutory assessment period can be extended for a fixed amount of time. Alternatively, the Appeals Office may use Form 872-A, which potentially extends the period of assessment until ninety days after either completion of Appeals Office consideration or notice by either party of its desire to terminate the consent (4).

If I File a Petition in Tax Court, How Should I Proceed with Appeals?

Approaching an appeal in a docketed case is slightly different than in a nondocketed case. The jurisdiction of the Appeals Office has only a limited duration. In order to participate in Appeals within the limited timeframe available, the taxpayer should take certain proactive steps to maximize the possibility of a beneficial outcome on Appeals. The taxpayer should do the following in a docketed case:

  1. The taxpayer should prepare for the Appeals conference before the Commissioner files its answer;
  2. If the taxpayer feels that he or she has not had sufficient time to develop the facts and law of the appeal, he can request the local office to hold off on sending the file to the Appeals Office;
  3. The taxpayer should begin preparing for the Appeals conference as soon as possible;
  4. After the taxpayer has completed preparing for the appeals conference and filed his or her answer, her or she should request the date the file was sent to Appeals, the date it was receives, and the name of the Appeals Officer to whom it was assigned;
  5. If jurisdiction of the Appeals Office is about to expire, the taxpayer can request an extension. This strategy is more successful when negotiations with the Appeals Officer have been ongoing and tend to suggest that a settlement is close. In order to request the extension, the taxpayer can write a letter stating that (1) there is a substantial likelihood that settlement of the entire case can be reached in a reasonable period, and (2) this possibility outweighs the need for commencement of trial preparation.

How a Tax Attorney Can Help with Appeals

Preparing for your Appeals conference can go a long way to achieving a favorable outcome for the taxpayer. If you think that your tax situation might make you a candidate for an Appeals process, you should consult with a knowledgeable tax attorney.

The Tax Lawyer - William D Hartsock Tax Attorney Inc. has been successfully helping clients with appeals since the early 1980s. Mr. Hartsock offers free consultations with the full benefit and protections of attorney client privilege to help people clearly understand their situation and options based on the circumstances of their case. To schedule your free consultation simply fill out the contact form found on this page, or call (858) 481-4844.

Tax Law References:

  1. 26 CFR § 601.106(c); Prop. Reg. § 601.106(c)(1).
  2. IRM 8.6.2 (Aug. 14, 2012).
  3. IRM (Feb. 8, 2011).
  4. IRM (Oct. 1, 2012); IRM 8.21 (Aug.10, 2012). Form 872-A is described at ¶ 8.06[5][b].

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The Tax Lawyer - William D. Hartsock, Esq. – San Diego Tax Attorney

Author: William D. Hartsock, Esq

A "Certified Tax Law Specialist" for over 37 years, Mr. Hartsock is one of the most trusted and respected tax attorneys in Southern California. Call today to discuss the facts of your case and learn about your options. Mr. Hartsock offers free consultations and all conversations are protected under attorney-client privilege; meaning that no information shared with a tax attorney will be shared with the IRS or California Franchise Tax Board.