In the IRS Tax Tip 2024-47, it presents the option of reaching out to the Independent Office of Appeals when there is a disagreement with the IRS. Note that this is a relatively informal process where you start with a written letter / petition, then, an officer of Appeals listen to your case (you can have legal representation in the meeting: call, video conference or in person) and support for your tax position. Finally, after considering the facts and circumstances of the case, IRS position and related outcomes in similar position will provide a recommendation.
The recommendation could be one of the following three options:
- In the IRS’s favor: If the facts and laws support the government’s position, the Appeals officer recommends that the taxpayer concede and give up the issue.
- In the taxpayer’s favor: If the law and facts support the taxpayer’s position or courts have ruled in favor of taxpayers in similar cases, the Appeals officer recommends that the IRS concede and give up the issue.
- Compromise: The Appeals officer may recommend a compromise when the facts or laws are unclear or the courts have made different rulings on similar cases. In this situation, Appeals may recommend a settlement where the taxpayer pays a percentage of the tax due.
Note that having more options in any potential disagreement with the IRS is always positive for the taxpayer and in many cases, we noticed that taxpayers or tax preparers are not aware of certain options such us a) escalate to the manager or supervisor, b) the Independent Office of Appeals (detailed on this post), c) reaching a settlement before starting the legal proceedings for the U.S Tax Court or d) any other options available in your specific case.
