What Is IRS Appeals?
The IRS Office of Appeals is an independent function within the IRS that resolves tax disputes without litigation. Appeals officers are not bound by the examining agent's position. They consider the hazards of litigation — the chance that the IRS would lose in court — and use that analysis to negotiate settlements. This makes Appeals the single most effective dispute resolution tool available to taxpayers.
How to Get to Appeals
You typically reach Appeals by filing a written protest in response to a 30-day letter (Letter 525 or Letter 950) from the examination division. The protest must include specific elements: your name and address, a statement that you want to appeal, the tax periods involved, a list of proposed changes you disagree with, the facts supporting your position, and the law or authority you rely on.
For disputes involving $25,000 or less, you can file a Small Case Request (Form 12203) instead of a formal written protest. This is a simplified process that does not require the same level of legal argument.
Letters You Will Receive
Once your case reaches Appeals, you will receive Letter 96 acknowledging receipt. Letter 380 will schedule your conference. The conference itself may be by phone, video, or in person. After the conference, you receive a decision letter or a closing agreement.
What Happens at the Conference
The Appeals officer reviews the case file, considers your arguments, and evaluates the government's chances of prevailing in court. If the IRS has a weak case, Appeals may concede most or all of the disputed issues. If both sides have reasonable positions, Appeals typically splits the difference. The goal is settlement, not litigation.
Collection Appeals
Appeals is not just for audits. If you disagree with a collection action — a levy, lien, or rejection of a payment plan — you can request an Appeals hearing through the Collection Due Process (CDP) program or the Collection Appeals Program (CAP). CDP hearings have the added benefit of allowing you to petition Tax Court if you disagree with the outcome.
Most taxpayers skip Appeals and either agree with the IRS or hire a lawyer and go to court. Both are more expensive than Appeals. If you have a reasonable case, Appeals is almost always the right move.