What if I disagree with the examination proposals

If you disagree with the examination proposals made by the IRS, you have several rights and options to appeal the decision. Here is a comprehensive explanation of the steps you can take:

1. Initial Discussion:
   • Contact the IRS employee identified in the letter you received to discuss the issues. If you cannot reach an agreement with this employee, you may request a discussion with the employee’s supervisor.
2. Fast Track Settlement (FTS):
   • If you still don’t agree after discussing with the supervisor, you may request Fast Track Settlement if your case qualifies. This process involves an Appeals Officer trained in mediation to help resolve disputes.
3. Administrative Appeal:
   • If you cannot resolve the matter through discussions or FTS, you can request an administrative appeal with the IRS Appeals Office. The Appeals Office is an independent function within the IRS that fairly and impartially settles disputes by considering arguments from both sides and applying relevant tax laws.
4. Written Protest:
   • To request an Appeals conference, you must submit a written protest. A formal written protest is required if the proposed change to the total amount of tax and penalties for any tax period is more than $25,000. This protest should include your reasons for disagreeing, which must be within the scope of the tax laws.
5. Documentation:
   • Ensure that you have provided the IRS employee handling your case with all requested information, documents, and explanations. If you provide new information or raise new issues to Appeals that the IRS has not previously considered, it may first need to be reviewed by an IRS employee, potentially delaying the resolution of your case.
6. Appeals Process:
   • The Appeals process is designed to resolve tax issues without going to court. Most disputes are settled informally at this level. If you do not want to appeal or disagree with the Appeals determination, you may take your case to court.
7. Court Options:
   • If you do not appeal within the IRS or cannot reach a settlement with Appeals, you may take your case to:
     • United States Tax Court (a prepayment forum where you can petition before making full payment, but only if you have received a notice or determination letter).
     • United States Court of Federal Claims (generally after fully paying the amount and timely filing a claim for refund with the IRS).
     • United States District Court in the judicial district where you reside or have your principal place of business (also generally after fully paying the amount and timely filing a claim for refund).
8. Statutory Notice of Deficiency:
   • If you do not respond to the 30-day letter or do not reach an agreement with an Appeals Officer, the IRS will send you a 90-day letter (notice of deficiency). You will have 90 days (150 days if addressed outside the United States) from the date of this notice to file a petition with the Tax Court.
9. Innocent Spouse Relief:
   • If you are the spouse requesting innocent spouse relief and the IRS denies your request, you can generally request an appeal. If you are a nonrequesting spouse, you can appeal if the IRS grants relief to your requesting spouse.

By following these steps, you can ensure that your disagreement with the IRS examination proposals is properly addressed and that you utilize all available avenues for appeal.

Sources:
Publication 3498-A (05/2021)
Publication 556
Publication 5 (4/2021)