Resolving Tax Problems – Appealing IRS Decisions

    Published: 06-16-2009
    Views: 10,222
    Laurence Lawler, National Director of the American Society of Tax Problem Solvers discusses how to resolve your tax problems. This video will cover the appeal of IRS actions.

    Lawrence Lawler: Hi! I am Lawrence Lawler, National Director of the American Society of Tax Problem Solvers. This series has to do with solving common tax problems. Today we are going to discuss the appeal of IRS actions. You have got to remember, they are not always right. The IRS does make mistakes or sometimes fails to consider something that they should have. But taxpayers have the right to appeal that. And three of the most common ones that we will talk about have to do with the appeal of an Offer In Compromise, the appeal of an Examination that the IRS has done on a taxpayer, or the appeal of a Collection Action. First, the appeal of an Offer In Compromise is done often right within the Offer In Compromise Unit. If you will picture the IRS as being one huge organization and just one corner of it being the Offer In Compromise Unit, within that one corner, where they consider offers and compromise when they are initially filed, and they determine whether or not they think they are an acceptable offer, there is another little corner within that corner called the Appeals Division. And they actually have Appeals Officers who work on offers and compromise. So if the taxpayer is unhappy with the results that they get by dealing with an Offer Examiner, they can appeal it to the Appeals Officers within the IRS Appeals Division, that is housed right within the Offer In Compromise Unit.

    I might suggest to you that you don't have to deal with the Appeals Unit that's within the Offer Unit, you can actually ask for a face-to-face appeals and have the case sent to the Appeals Office in your own city.

    Now, because this has to do with a Collection Action, because that's what an offer is all about, it has to do with the taxpayer who owes money and can't afford to pay all of it, you could actually be dealing with a Settlement Officer rather than an Appeals Officer.

    Settlement Officers hear things that have to do with collection. They are right in the Appeals Division. They have the same or even greater authority perhaps than some of the Appeals Officers. But they deal with things that come from collection. Now, the difference is, there are also Appeals Officers that are titled that and they deal with things that come from the Exam Division.

    We generally recommend that you do request a face-to-face appeals hearing when you are unhappy with the results on your Offer In Compromise. We are convinced that you get more done by dealing face-to-face and explaining the taxpayer's situation over the desk with an Appeals Officer, or a Settlement Officer, in the case of an Offer In Compromise.

    I would like to point out, by the way, that the IRS Appeals Division is very good to work with. It's not a high stress area. They are knowledgeable people, who have the ability to make decisions, the authority to make decisions, and they will generally try to do what is right. They obviously don't give away the store for the government, but they will listen to the taxpayer's side of the argument, and they will do something to try and help the taxpayer, if they think that's the right thing to do.

    When a taxpayer has been audited and something comes out of the Exam Division, in other words, they have look at the taxpayer's filed tax return, perhaps disallowed certain deductions, or picked up items as income that hadn't previously been included, if the taxpayer does not agree to the findings of the Auditor, and the Auditor, by the way, is typically called a Revenue Agent, they are also Tax Compliance Officers, that sort of thing, but basically they are Revenue Agents. They are people who can examine a tax return. Revenue Officers are actually the people who collect the tax.

    When a Revenue Agent has done an audit and comes up with a Dollar amount that's due, and the taxpayer doesn't agree with them, the first thing they should do, by the way, is talk to the Revenue Agent's Supervisor. They may be able to settle it right there at that level. But if in doing that they are unsatisfied, then they do have the right to go to Appeals, and then they will be sitting with an Appeals Officer, who has the authority to make a decision and change what the result was that the Examiner came up with.

    Often, by the way, in these hearings, the Examiner and his Supervisor will be present. So I am going to suggest to you that you would be well advised to be represented at these hearings by a CPA, an attorney, or an enrolled agent. Because you are getting into an area where you would have the deck kind of stacked against you, with the Examiner Officer and his Supervisor there against the taxpayer, and of course the impartial Appeals Officer listening to both sides. But you would be best off to be represented at this point in time.

    When you are dealing with items that came out of the Collection Division, you will be dealing, as I said earlier, with a Settlement Officer. Many times, by the way, we represent taxpayers going there, we don't take the taxpayer with us. We have all of the taxpayer's information and we sit with the Settlement Officer and review the finances, and help to make a decision as to what is the right result.

    Often having the taxpayer there, not only causes the taxpayer a certain amount of anxiety, but also will have the taxpayer answering questions or volunteering information that perhaps they should just have kept to themselves.

    Using the information that we have provided in this series of solving common tax problems, you should be pretty well prepared to address your own tax problem. And start the process immediately to get back on track with the IRS. It's no fun having to deal with this. It causes many people sleepless nights and much anxiety, and it's a constant distraction. So I recommend to you that you take our advice, which is, there is a solution for every tax problem. And I suggest to you that you get going and get your solution and start it right away.

    So when you are looking for representation, make sure you look for the ASTPS, that's the American Society of Tax Problem Solvers logo. They are the individuals who are dedicated to helping you solve your tax problems and represent you as well as possible before the IRS. I hope you have good luck in solving your tax problem, and thanks for your attention.