How to File an Appeal with the IRS: A Taxpayer’s Guide

To file an appeal with the IRS, respond to the letter you received—usually within 30 days—using the correct form and including a written statement of what you disagree with and why. For audits, this means filing Form 12203 or a formal protest; for collection actions like liens or levies, use Form 12153 to request a hearing. Your appeal goes to the Independent Office of Appeals, which reviews your case impartially. If the issue involves significant tax or complex law, working with a tax attorney or CPA is strongly recommended.

Opening the mail to find a notice from the IRS about an audit report, collection action, or penalty can make your heart sink. If you’re wondering How Do I File an Appeal with the IRS, this guide explains the options available to safeguard your financial interests through clear, actionable steps.

For example, a 30-Day Audit Letter generally requires a formal written protest or request, whereas a Final Notice of Intent to Levy or Notice of Federal Tax Lien must be responded to with Form 12153. Each letter carries its own appeal rights and demands different forms and supporting documentation. In all cases, your response should include your personal information, the tax periods at issue, the specific items you disagree with, and the facts supporting your position.

Understanding the IRS Appeals Process

The IRS Independent Office of Appeals serves as an impartial mediator within the IRS. Its mission is to resolve tax controversies fairly without litigation. This office operates separately from the IRS divisions that make the initial determinations about your taxes.

When you file an appeal, your case is assigned to an Appeals Officer who was not involved in the original decision. This officer reviews your case with fresh eyes, considering both the hazards of litigation (the IRS’s chances of winning if the case went to court) and whether continued dispute is cost-effective.

After filing for a hearing, it typically takes several months for a case to be assigned to an Appeals Officer. While some appeals take several months to resolve, some can take a year or more as the case works its way through the IRS’s systems and through the Appeals process.. The appeals process has successfully resolved many tax disputes without court proceedings, saving both taxpayers and the government substantial resources.

• An impartial review of your case
• The opportunity to present your side of the story
• A potential resolution without costly litigation
• More flexibility in settlement options than available in court
• Confidentiality of discussions during the appeals process

Types of IRS Determinations You Can Appeal

You can appeal various IRS decisions, including:

• Examination (audit) results proposing additional tax
• Collection actions such as liens, levies, or seizures
• Penalty assessments
• Rejected offers in compromise (OICs)
• Proposed trust fund recovery penalty assessments
• Denials of innocent spouse relief
• Rejection of proposed installment agreement requests
• Installment agreement terminations
• Disallowance of refund claims
• Employment tax adjustments

It is critical to understand exactly which determination you’re appealing, as different types of appeals have different procedures and deadlines. The specific documentation you’ll need depends on which IRS action you’re contesting.

Note that you cannot appeal IRS decisions based solely on moral, religious, political, constitutional, or conscientious grounds. Your appeal must be based on disagreement with the IRS’s interpretation of facts, application of the law, or understanding of your situation.

Appealing an Examination (Audit) Decision

If you disagree with an IRS audit, you’ll receive a letter (typically a 30-day letter) explaining your right to appeal. For audits involving $25,000 or less in disputed tax, penalties, and interest per tax period, you can use the small case request process.

To file a small case request:

1. Complete IRS Form 12203, Request for Appeals Review
2. Include a brief written statement outlining your disagreements
3. Submit within 30 days of receiving the examination report

For disputes exceeding $25,000 or for certain complex cases, you’ll need to submit a formal written protest that includes:

• Your name, address, and contact information
• A statement declaring your intent to appeal the IRS findings
• A copy of the letter showing the proposed changes
• Tax periods or years involved
• A detailed list of the specific items you disagree with and why
• Facts supporting your position
• Relevant law or authority supporting your position
• A signed declaration stating the information is true under penalties of perjury

Ensure that your documentation is organized chronologically and includes any evidence supporting your position, such as receipts, canceled checks, loan agreements, or expert opinions.

Appealing a Collection Action

If the IRS is taking collection action against you through a lien or levy, you have two primary appeal options: Collection Due Process (CDP) hearings and the Collection Appeals Program (CAP).

Collection Due Process (CDP) Hearings

In IRS collections cases, CDP hearings offer the most comprehensive appeal rights. If you file a timely CDP hearing request, the IRS must suspend most collections activity with respect to the period or periods at issue on the notice carrying CDP hearing rights.This is very powerful and important when the IRS issues a final notice of intent to levy (e.g., LT11).

 It is almost always in your best interest to exercise your right to a CDP hearing.

You can request a CDP hearing by filing Form 12153, Request for a Collection Due Process or Equivalent Hearing, within 30 days of receiving:

• Notice of Federal Tax Lien Filing
• Final Notice – Notice of Intent to Levy
• Notice of Jeopardy Levy
• Notice of Levy on Your State Tax Refund

During a CDP hearing, you can:

• Challenge the appropriateness of the collection action
• Propose collection alternatives such as an installment agreement or offer in compromise
• Verify that collection procedures were followed correctly
• Address the underlying tax liability in certain circumstances

At the conclusion of the CDP hearing, the hearing officer (i.e., IRS Appeals Officer) will issue a notice of determination. A taxpayer can petition the U.S. Tax Court to review the notice of determination. . 

If you miss the 30-day deadline to file the CDP, but file within one year, you can request an Equivalent Hearing, which offers similar considerations but without the right to judicial review.

Collection Appeals Program (CAP)

The CAP is available for certain collection actions, including:

• Proposed or actual filing of a Notice of Federal Tax Lien
• Proposed or actual levy actions
• Seizure of property
• Denial or termination of installment agreements

Unlike CDP hearings, CAP appeals must be filed before the collection action takes place or immediately after speaking with the Collections Manager. For CAP appeals, you’ll need to file Form 9423, Collection Appeal Request.

CAP appeals rights are not as powerful as CDP hearing rights, but they can be strategically important particularly when you are at loggerheads with an IRS collections representative and you need an impartial review of your case and your arguments. 

Appealing a Penalty Assessment 

The IRS imposes various penalties for issues such as failing to file returns, failing to pay taxes on time, or accuracy-related problems. If you believe a penalty was assessed incorrectly or should be abated, you can appeal the penalty directly in certain circumstances. In others, you must make a request for abatement of penalties and file an appeal upon rejection.

An example of a request for penalty abatement under certain circumstances, and appeal a subsequent denial, may include the following steps:

1. Request penalty abatement by writing a letter or using Form 843, Claim for Refund and Request for Abatement
2. Explain why you had reasonable cause for the action that led to the penalty or why the penalty is otherwise not supported
3. Provide supporting documentation

If the IRS rejects the request for abatement of penalties using either an 843, or through other appropriate methods, as the case may be, the IRS generally grants valuable appeal rights.

Depending on the specific nature of the penalty, reasonable cause arguments may include:

• Reliance on a tax professional’s advice (with limitations)
• Death, serious illness, or unavoidable absence
• Fire, casualty, or natural disaster
• Inability to obtain necessary records
• Reliance on incorrect advice from the IRS

First-time penalty abatement may be available for certain penalties if you have no assessed penalties for the three tax years prior to the year you received a penalty.

For trust fund recovery penalty assessments, you must respond to the IRS within 60 days of receiving Letter 1153, providing:

• An explanation of your responsibilities and duties
• Why you disagree with the penalty
• Supporting documentation

Fast Track Settlement and Mediation Options

Fast Track Settlement (FTS)

FTS is available during an audit and allows you to work with an Appeals Officer who acts as a mediator between you and the examination team. Benefits include:

• Resolution in as little as 60 days
• Preservation of your traditional appeal rights if FTS doesn’t resolve all issues
• More flexible settlement options

To request FTS, you and the IRS examiner must complete Form 14017, Application for Fast Track Settlement.

Post-Appeals Mediation (PAM)

If you’ve gone through the appeals process but haven’t reached a resolution, PAM offers a final opportunity to resolve the dispute with the help of a trained mediator. This non-binding process is available for both examination and collection cases.

When to Consider Hiring a Tax Professional

While you can represent yourself in an IRS appeal, the complexity of tax law and procedure often makes professional representation valuable. Consider hiring a tax professional if:

• The disputed amount is substantial
• The issues involve complex tax law
• You are uncomfortable dealing directly with the IRS
• You lack the time to manage the appeal process
• The case involves multiple tax years or issues

These situations often require specialized knowledge and experience to navigate effectively. Professional representation can greatly increase your chances of a favorable outcome, especially when large sums or complicated legal questions are involved.

Tax professionals who can represent you include:

• Enrolled Agents (EAs) – licensed by the IRS to represent taxpayers
• Certified Public Accountants (CPAs) – accounting professionals with tax expertise
• Tax Attorney – lawyers specializing in tax law

Before hiring a representative, ask about their:

• Experience with your specific type of tax issue
• Success rate in IRS appeals
• Fee structure and estimated total cost
• Communication style and availability

For example, if your case involves complex litigation, a tax lawyer can provide valuable expertise.

To authorize a representative, you’ll need to complete Form 2848, Power of Attorney and Declaration of Representative.

Tips for a Successful IRS Appeal

To maximize your chances of success, make sure to:

1. Meet all deadlines – Late filings often result in lost appeal rights. 
2. Be specific – Clearly identify what you disagree with and why.
3. Provide organized documentation – Label and chronologically arrange supporting evidence.
4. Know the relevant tax law – Understanding the law helps with crafting a strong, viable argument and knowing which arguments are a waste of time and energy.Cite specific Internal Revenue Code sections or court cases that support your position.
5. Focus on facts, not emotions – Appeals Officers respond to factual and legal arguments.
6. Be respectful – Maintaining professionalism improves your communication.
7. Prepare for your conference – Know your case details and be ready to discuss specific issues.
8. Consider compromise – Be open to reasonable settlement options.
9. Follow up appropriately – Respond promptly to any additional information requests.
10. Document all communications – Keep records of all interactions with the IRS.

What to Expect After Filing Your Appeal

After submitting your appeal request, the process typically follows these steps:

1. Acknowledgment – The IRS sends a letter confirming receipt of your appeal.
2. Assignment – Your case is assigned to an Appeals Officer.
3. Scheduling – The officer contacts you to schedule a conference (in-person, by phone, or by correspondence).
4. Conference – You present your case and discuss potential resolution.
5. Consideration – The Appeals Officer reviews all information.
6. Decision – You receive a written determination.

If the Appeals Officer proposes a settlement, you can accept it by signing an agreement form. If you disagree with the Appeals Officer’s determination, you may have the ability to file a petition with the U.S. Tax Court at the conclusion of certain appeals, such as the Collection Due Process appeal. 

Remember that the appeals process is designed to resolve disputes fairly and efficiently. While not every taxpayer wins their appeal, many achieve at least partial relief or better payment terms through this process.

Facing a Tax Problem? We’re Here to Help.

At Hughes Noff Tax Law, we know how overwhelming it can feel when the IRS or state tax authorities get involved. Whether you’re dealing with an IRS audit or tax dispute, international tax non-compliance, or tax debt resolution, we’re here to provide you with relief and reduce your anxiety. Let us deal with the federal government—so you don’t have to.

We approach every client with empathy and provide the advocacy, direction, service, and resolution they deserve. We have over 25 years of combined experience resolving complex tax controversies and understand the unique and sensitive nature of these matters. As both attorneys and CPAs, we understand the law and the numbers. Our clients appreciate the clarity and peace of mind we help restore—read their stories here.

Contact us today or call 410-694-7758 to schedule your consultation.