When the IRS examines your return and makes adjustments, it must send a notice to inform the taxpayer of these actions. From here, the taxpayer has several options:
- Ignore the notice. This is not truly an option as it can have terrible financial consequences.
- Accept and pay the adjustment. This is a personal choice, and may be wise if the adjustment is minor.
- Challenge the IRS. While filing an action in tax court is certainly an option, a more cost effective first step may be a tax appeal with the IRS.
The IRS Appeals office is an independent office within the IRS that gives taxpayers an opportunity to settle disputes without going to tax court. The first step that a taxpayer must take before they can get before a tax appeal officer is to file a protest letter.
What Is in a Protest Letter?
A formal written protest letter is a mandatory and critical first step in the tax appeal process. In essence, it informs the tax appeals office that you with to challenge the IRS adjustment and why. This letter must contain the following information:
- A taxpayer’s name and contact information.
- A statement that the taxpayer wishes to appeal an IRS decision.
- A copy of the adjustment letter the taxpayer received from the IRS.
- The timeframe that you want the appeal to focus on.
- The recitation of the adjustments that the taxpayer is disputing and why.
- Facts that support the taxpayer’s position.
- The legal authority that supports the taxpayer’s position.
- The taxpayer’s signature, which verifies that the contents of the letter are true to the best of the taxpayer’s knowledge.
I cannot stress how important this letter is. It not only sets the tone of your appeal, but it can limit the scope of your challenge. In short, your letter can determine what you may appeal and whether the tax appeals officer takes your appeal seriously.
Essentially, the IRS is asking you to specifically identify your challenges to the adjustments, and then to provide facts, laws, and analysis to support your challenges. While there is plenty of sample tax appeals protest letter on the Internet, I would HIGHLY recommend that you steer clear of a sample or form letter, as there really is no “one size fits all” approach to tax protests. Instead, your letter needs to be clear, concise, accurate, and compelling as to your specific tax situation.
Instead, I would recommend consulting with a tax appeal attorney before submitting a protest letter. While crafting a formal protest letter with proper legal research, an articulate recitation of facts, and a compelling argument may be outside of your wheelhouse, this is exactly what attorneys do on a daily basis.
You Need an Attorney
If you are considering a tax appeal, contact the Law Offices of Robert S. Thomas. I am knowledgeable about the nuances of the law and will help you craft a protest letter that the IRS tax appeals office will take seriously. With over twenty years of legal experience in fighting IRS decisions and actions, I can help you exercise your legal rights. Contact our office today at 847-392-5893 to schedule an appointment or visit our website today.