Many taxpayers believe that once the IRS makes a decision, it’s final—but that isn’t usually the case. Whether it’s a proposed adjustment, a penalty, or an audit finding, taxpayers have the right to disagree with the IRS and challenge its determinations.

Know Your Rights as a Taxpayer

Back in 2014, the IRS adopted what it calls the Taxpayer Bill of Rights to help taxpayers better understand their rights when dealing with the agency. The explanation includes 10 promises to taxpayers, including the right to be informed (about laws, procedures, and individual decisions), quality service, paying no more than the correct amount of taxes, challenging the IRS’s position (and being heard), appealing a decision in an independent forum, finality, privacy, confidentiality, representation, and a fair and just system. 

Of course, even with its explanations, these rights are pretty broad, and the wording can be left to interpretation. But when you receive an initial tax bill from the IRS, for instance, you can reasonably expect an opportunity to disagree. 

What To Do First

First, review the letter you received from the IRS. There should be an enclosed brochure that explains your right to appeal the IRS’s decision. That process is handled by the IRS Independent Office of Appeals. (Yes, it’s part of your rights that the advocacy center and appeals office are independently run.) 

Points to Keep in Mind

1. The clock is ticking. We can’t emphasize enough the importance of opening any mail from the IRS immediately. Most decisions by the IRS must be disputed within 30 or 90 days (the exact timeframe will be denoted on the letter). Plus, interest and penalties are already accruing. 
2. You might need help. If a CPA helped you prepare the taxes in question, be sure to communicate with them because they may be able to resolve things faster and easier than you can. If you did not use a CPA, you might consider consulting one now, depending on what’s at stake. The Taxpayer Advocacy Center offers free tax assistance and advocates for those who qualify. 
3. There are special case procedures for circumstances that include innocent spouse relief, mediation, rejected offers in compromise, penalty appeals, and art appraisals. Don’t assume that the procedure for one is the same as another. 
4. Consider the drawbacks of appealing. While disagreeing with the IRS is your taxpayer right, there may be consequences. Take privacy for one. If an appeal advances to court, details submitted may become part of the public court record. There may also be additional scrutiny, costs, or legal fees to consider. 

Challenging the IRS isn’t just possible—it’s your explicit right as a taxpayer. By reading every IRS notice, acting quickly, and seeking qualified help when the stakes are high, you can use the system to your advantage and make your side heard.

Feel free to contact us with questions. 

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