How to Appeal an IRS Audit
Most people dread the possibility of an IRS audit. However, it is important to know that the results of an IRS audit can be appealed. If you disagree with the findings of the audit, then you can file a protest letter and enter negotiations with the IRS, or you can file in federal tax court. This article will explain how to proceed with either of these options.
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Instructions
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Review the findings from your IRS audit.
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Write a protest letter to the IRS within 30 days of receiving the written findings of your IRS audit. Your protest letter should include your personal information, the audit findings with which you disagree, the facts that support your conclusion that the audit was incorrect and the tax law upon which you base your argument.
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Find the tax law that is applicable to your situation. Visit your local law library to find the appropriate tax laws--you can contact your local bar association or law school to find your closest law library. Websites like Findlaw.com and Nolo.com are specifically designed to help lay people wade through tax issues. And of course, don't hesitate to go to the source: the IRS website is, naturally, a wealth of information on tax laws.
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Appeal negotiations are likely to take place. The IRS appeals agents are able to settle a dispute with a taxpayer if they feel that the taxpayer has a solid legal argument that is likely to win in tax court. If the IRS is willing to settle with you, its agents will enter a written stipulation agreement with you.
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If you do not reach an agreement with the IRS appeals agent, you can appeal to federal tax court. You can also forgo the appeals process within the IRS and proceed directly to the federal tax court within 90 days of receiving the original tax audit letter from the IRS.
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Tips & Warnings
Keep all records that support your tax filings for 7 years.
Be thorough in the information provided to the IRS in order to avoid additional penalties and interest payments.
Remember to appeal within the required time frames or you will forfeit your rights to an appeal.
