Although both the federal District Courts and the U.S. Tax Court are judicial forums for resolving tax disputes, there are many opportunities for reaching a favorable resolution before this stage. Specifically, the Internal Revenue Service offers administrative options, such as appeal filed with the Office of Appeals.
Filing an Administrative Appeal with the IRS
The Office of Appeals is an independent organization within the IRS. Its mission is to resolve tax controversies in an impartial manner, without court litigation. Nearly any type of proposed IRS action can be appealed, such as proposed tax assessments or collection activities. Significantly, a taxpayer does not waive his or her right to judicial review by first filing with Appeals.
Consulting With an Attorney for Your IRS Appeal
As an informal administrative process, the rules of evidence or procedure do not apply. This allows a taxpayer to present the evidence that best represents his or her position, without worrying about the procedures lawyers follow when presenting evidence in court.
Evaluating Your Appeal for Litigation Hazards
A taxpayer can be represented by a tax attorney even at this administrative stage. An attorney can review your case from a strategic viewpoint and help you develop a more persuasive presentation. An attorney will also understand how the IRS will view the litigation hazards of your claim, which can significantly influence your appeal outcome.
Although an attorney is not required for your IRS administrative appeal, a favorable resolution could substantially save you time and money. A taxpayer typically receives a First Notice from Appeals within 60 days of the administrative filing. On its website, the IRS also touts that Appeals has historically been able to settle the majority of cases before it.