When our clients are interested in appealing an IRS Audit Notice of Determination 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.