Appealing an IRS Audit Notice of Determination

How Does the IRS Appeals Process Work Once an Audit is Completed?

When an IRS auditor issues the “Notice of Determination,” the audit is completed and the findings of the auditor are considered to be final. The taxpayer has two options at this point:

1. Pay the additional amounts identified by the audit

2. Appeal the findings of the audit listed in the “Notice of Determination”

In many cases, our experienced attorneys accomplish a successful outcome during the audit and there is no reason to appeal the resulting “Notice of Determination.” However, in recent years the IRS has become much more aggressive in its audit tactics and its determination to “discover” issues in your tax returns generating additional tax debt. The IRS has used an algorithm to identify returns that fall into a specific pattern of behavior, and this is, in all probability, the reason you were selected for an audit. You can rest assured that the IRS auditor has a strategy before your audit ever begins and will have established a goal for increasing the amount of tax you will owe after the audit is completed. This is what IRS auditors do, and how they are measured by the IRS.

If the auditor has struggled to grasp the principles of accounting employed by a client, has been adversarial, or has reached a determination that is unfair or illegal, the taxpayer must appeal. An appeal will delay the time before the taxpayer must pay his or her taxes, providing time to amass that amount or to develop a strategy for payment to the IRS. In most of the cases we handle, the appeal will lower the amount you owe to the IRS. In many cases, this is a substantial figure. Interest may be accumulating on the amount the auditor has determined that you owe, but this is usually inconsequential when compared to the amount you will save on appeal.

The IRS Audit Appeal

We file a Letter of Complaint on behalf of our client with the IRS District Director. In most cases, we have been in contact with this person throughout the scope of the audit and we have established not only a good working relationship, but also some basis for the appeal of the Notice of Determination. At this point we are also able to obtain copies of all of the auditor’s notes and files associated with your audit, and this provides us with even more detailed information upon which to build a successful appeal.

The appeal must be filed within 30 days of the issuance of the Notice of Determination. We meet with the appeals officer and discuss the facts of the audit. It is important for the appeals officer to fully understand the legal underpinnings of our argument, and our intention to pursue litigation in Tax Court. The appeals officer has broad powers to evaluate the impact and costs of litigating the case, and to balance these against the facts at hand and the best interests of the IRS and the taxpayer. We negotiate the specific issues involved, as the appeals officer will not entertain simply reducing the tax bill by a percentage or based upon some generic formula.

Based upon these negotiations, the appeals agent formulates an agreement known as a “Stipulation.” The Stipulation will include discussions as to how much the bill is to be adjusted, specific determinations for when and how the debt is to be paid, and reasons for adjustment to the findings in the Notice of Determination. If we are unable to reach an appropriate agreement during the appeal, the next step in the process is to pursue the case in Tax Court.

Effective Tax Attorneys Build a Foundation for an Appeal and Successfully Guide Their Clients to Resolution

The experienced and knowledgeable tax attorneys at Allen Barron not only understand tax law, they have the expertise and support of accounting professionals and experts. You are represented by a team of professionals who can represent you through your appeal, while having the strength, credibility, and expertise to gain the respect of the IRS appeals officer and negotiate a successful resolution. We invite you to contact us with any questions regarding an IRS audit or appeal, or to call for a free and substantial consultation at 866-631-3470.

It is possible to stand up to the IRS, and to successfully appeal the Notice of Determination issued by an IRS auditor. We guide our clients through every step, and they value our expert advice and the peace of mind they gain during the experience.