How to Defend Yourself in a IRS Appeal Case
After many taxpayers get audited by the Internal Revenue Service they find themselves in a situation in which the government is asking for dollars above and beyond what seems fair.
After your audit with the IRS you have appeals rights. Many times the appellate officer is just trying to close his or her case without understanding your point. Be persistent.
Do not give up. Because you have an alternative dispute resolution options that few people know about.
Know the system so you can fight and win.
Alternative Dispute Resolution
Fast Track Settlement (Large Business and International Division Taxpayers)
Fast Track Settlement (FTS) offers Large Business and International Division (LB&I) taxpayers a way to resolve audit issues during the examination process in less than 120-days.
Working with LB&I and Appeals, taxpayers can use the settlement authority and mediation skills of Appeals to shorten their overall experience with the Internal Revenue Service.
FTS reduces the combined LB&I-Appeals process time by two years.
Fast Track Settlement (Small Business and Self-Employed Taxpayers)
Small Business/Self-Employed and Appeals have designed an alternative dispute resolution strategy for small business and self-employed taxpayers, called the SB/SE Appeals Fast Track Settlement.
The FTS program was designed to resolve audit issues during the examination process within a goal of 60 days from acceptance of the application in Appeals.
The process uses the settlement authority and mediation skills of Appeals.
SB/SE and Appeals has now expanded the program nationwide.
A taxpayer who is interested in participating in the SB/SE FTS, or who has questions about the program and its suitability for the taxpayer’s case, may contact the Examination or Specialty Program group manager.
To apply for the SB/SE FTS program, the taxpayer and the group manager need to submit Form 14017, Application for Fast Track Settlement, and the taxpayer’s brief, concise and soundly written response to the Service’s position.
Fast Track Settlement (Tax Exempt and Government Entities Taxpayers)
On December 1, 2008, Tax Exempt and Government Entities (TE/GE) and Appeals announced a Fast Track Settlement program for TE/GE taxpayers.
The program gives TE/GE taxpayers under examination by any of the five business units within TE/GE an opportunity to resolve their disputes within 60 days of acceptance into the program.
An Appeals officer trained in TE/GE issues will mediate the issues and, when necessary, utilize Appeals settlement authority to resolve the issues.
Announcement 2008-105, 2008-48 IRB 1219 explains the eligibility requirements and types of cases excluded from the program. TE/GE includes Employee Plans, Exempt Organizations, Indian Tribal Governments, Federal/State/Local Governments and Tax Exempt Bonds.
Fast Track Mediation (Small Businesses and Self-Employed Taxpayers)
Fast Track Mediation (FTM) gives Small Businesses, Self-Employed (SE/SE) taxpayers and the IRS the opportunity to mediate disputes through an IRS appeals officer, who acts as a neutral party.
In this program, most tax disputes are resolved within 40 days compared to several months though the regular appeal process.
IRS offers this new service designed to expedite case resolution on disputes that arise from examination or collection actions.
The IRS does not like to let people know about this process because it slows down cases in their inventory always understand you can appeal within the appeal.
Early Referrals
Taxpayers whose returns are under the jurisdiction of Examination or Collection may request the transfer of a developed but unagreed issue to Appeals.
Examination or Collection will continue to develop those issues not referred to Appeals. The early resolution of a key issue may encourage taxpayers and the Service to agree on other issues in the case.
Early referral can also be requested with respect to issues regarding an involuntary change in method of accounting, employment tax, employee plans and exempt organizations. Regular Appeals procedures apply, including taxpayer conferences.
Post Appeals Mediation
Mediation is available for certain cases that are already in the Appeals process only after Appeals settlement discussions are unsuccessful and, generally, when all other issues are resolved but for the issues for which mediation is being requested.
Mediation is a non-binding process that uses the services of a mediator, as a neutral third party, to help Appeals and the taxpayer reach their own negotiated settlement.
To accomplish this goal, the mediator will act as a facilitator; assist in defining the issues; and promote settlement negotiations between Appeals and the taxpayer.
The mediator will not have settlement authority in the mediation process and will not render a decision regarding any issue in dispute.
Arbitration
Arbitration is available for certain cases within Appeals jurisdiction that meet the operational requirements of the program.
Generally, this program is available for cases in which a limited number of factual issues remain unresolved following settlement discussions in Appeals. Appeals and the taxpayer will be bound by the arbitrator’s findings.
The arbitration procedure uses the services of an arbitrator either from Appeals or from an outside organization.
Simultaneous Appeals/Competent Authority
The simultaneous Appeals/competent authority procedure encourages taxpayers to request competent authority assistance and the participation of Appeals while a case is under the Examination Division’s jurisdiction. Revenue Procedure 2006-54 contains the competent jurisdiction.
Revenue Procedure 2006-54 contains the competent authority procedures. Section 8 of Rev. Proc 2006-54 specifies the circumstances under which the simultaneous appeals/competent authority procedure may be requested and describes the role of Appeals.
Contact us today for free initial tax consultation so you can learn how to defend yourself against an IRS tax audit or an IRS appeals case.
You will speak directly to tax attorneys, CPAs, or former IRS agents to review your situation and give you an honest opinion about your chances of success.
How to Help yourself in IRS Appeals Case – IRS Appeals Representation, Former IRS – IRS Audits
