Many of the different departments within the IRS are responsible for making decisions concerning the application of tax law to various taxpayer issues. In some cases, agreement on these issues, or determinations, cannot be reached. In other words, negotiations between the taxpayer or his representative, and the IRS employee have broken down and the two sides cannot agree on a conclusion to the case.
This is where Appeals comes in. Appeals is supposed to be independent of any other IRS office and serves as an informal administrative forum for any taxpayer who disagrees with a prior IRS determination. Appeals provides a venue where disagreements concerning the application of tax law can be resolved on a fair and impartial basis for both the taxpayer and the government. The mission of
Appeals is to settle tax disagreements without having to go to the Federal Courts and a formal trial.
In years past, Appeals’ Officers who heard Collection appeals were considered to be the cream of the crop of IRS employees. The most knowledgeable employees in their field were selected to be Appeals’ Officers. In the past five years the IRS has added an additional employee designation under the umbrella of the Appeals Division, Settlement Officers. Settlement Officers were former Collection Division Revenue Officers. The majority of the nation’s Settlement Officers are assigned to work Collection Appeal cases from the several IRS Service Centers across the country. There are few Settlement Officers that have the knowledge and expertise to handle the Collection Appeals assigned to them. The vast majority were sub-par former Revenue Officers who are now sub-par Settlement Officers. In our many years of dealing with IRS employees, we have found that the more knowledgeable the employee is, the more fair their decision on a case. The Settlement Officers now in the Appeals Division are neither knowledgeable nor fair in their decision-making abilities. This makes our job in representing our clients more difficult and the process of presentation and documentation in filing Appeals more important.
Our firm only files Appeal Requests on issues involving balances due by our clients, individuals or businesses. We do not file any Appeal Requests involving Audits. There are six areas in which we will file an Appeal Request on behalf of our clients.
Collection Due Process Appeal (CDP) – If you or your business owe the IRS, you will receive a series of Notices showing the tax, penalties and interest you owe. At a certain point in time, depending on what kind of tax you owe and the amount of tax you owe, you will receive two Notices of Collection Due Process by certified mail. The two CDP Notices will not be mailed at the same time. One of the CDP Notices gives you thirty-days before the IRS will begin enforced collection (Levying or seizing your assets). If you have not already worked out a solution to your IRS problem, you have thirty-days to do so or file the CDP Appeal Request. If you timely file your CDP Appeal, the IRS cannot take any further enforcement actions against you until the Appeals’ Officer makes his ruling on the case. You are allowed to propose any type of solution to the Appeals’ Officer. If you timely file your CDP and still cannot resolve your problem to your satisfaction with the Appeals’ Officer, you can then file suit in US District Court against the IRS.
The other Collection Due Process Notice involves the filing of the Federal Tax Lien. Once the Lien has already been filed, the IRS will then send you the CDP Notice to appeal the filing of the tax lien. You get your appeal rights after the fact. You can file the CDP to give your explanation of why you think the lien should not have been filed. Valid reasons are very limited and it is extremely difficult to persuade Appeals to withdraw a filed tax lien; however you have the right to file suit in US District Court if you disagree with Appeals’ decision.
If you are late in filing a CDP Appeal, you can still file and receive a hearing with an Appeals’ Officer, but you cannot file suit if you disagree with decision.
Collection Appeals Program Appeal (CAP)– Taxpayers have the right under the Internal Revenue Code to appeal the rejection of an Installment Agreement and also appeal the termination of an Installment Agreement. IRS also allows taxpayers the right to administrative appeal of many actions taken by IRS employees. The main ones being the right to appeal levy, lien and seizure actions by the IRS. If an agreement is not reached with the Appeals’ Officer, you cannot file suit.
Offer in Compromise Appeal (OIC) – If you file an Offer in Compromise and the OIC Specialist or the Service Center OIC Group rejects it, you have the right to request an Appeals Conference. You may present your case and new or additional information to an Appeals’ Officer. If you cannot reach an agreement with the Appeals’ Officer, you cannot file suit; unless the OIC was filed as the result of a timely filed CDP Appeal as explained above.
Trust Fund Recovery Penalty Appeal – If the Trust Fund Recovery Penalty is proposed against you because the Revenue Officer has made a determination that you were a responsible person and that you acted willfully, you can appeal the Revenue Officer’s decision. You will need to present all facts, documents and reasoning as to why you believe you are not a responsible person or that you did not act willfully.
Penalty Appeal – If you were charged penalties on a tax liability and you made a request for abatement to any IRS employee but were denied relief from the penalties; you are allowed to file a Penalty Appeal Request.
Denied Claim Appeal – If you filed an amended return, an original return, a refund claim or any other type of claim, and your claim was denied; you are allowed to file an Appeal on a Denied Claim.
All of the appeal issues described above have strict filing deadlines and require complex knowledge by the tax professional requesting the appeal. Each of our Associates has over 35-years experience in reviewing and making determinations on the validity of the appeals listed. Knowledge of the appeals process, subject matter, documentation and presentation are keys to the success of any appeal. TSI is the leader in successful appeals.