Tax audits or collection matters sometimes result in unfavorable decisions at the initial level of review, to which you do not agree.  Thus appealing an adverse tax decision is sometimes desired and/or necessary.  By appealing an adverse tax decision, taxpayers have the opportunity to resolve a tax controversy, without litigation, on a basis that still protects their rights.  McLaughlin Legal helps clients resolve all types of assessment and collection tax controversies through appeals procedures with the IRS, FTB, BOE, and EDD.  As stated by the IRS, its Office of Appeals is committed to:

resolve tax controversies, without litigation, on a basis which is fair and impartial to both  the Government and the taxpayer in a manner that will enhance voluntary compliance and public confidence in the integrity and efficiency of the [IRS].

But what does that mean for a taxpayer, and when can they get before an administrative appellate body?

When can I Appeal a Tax Determination?

A tax appeal may be needed for any number of reasons, and based on any number of determinations.  Some of the more common that McLaughlin Legal helps clients with include:

Audit Appeals

After most tax audits, taxpayers may request an appeals conference.  Generally appeals conferences are informal, yet quasi-judicial, meeting geared towards resolving the tax dispute and avoiding litigation.  At the Federal level, an IRS audit appeal can occur before the issuance of a Statutory Notice of Deficiency (pre 90-day case) or after a petition is filed with the U.S. Tax Court (90-day or docketed case).

Penalty Appeals

If the IRS has is preparing to assess a penalty, or a penalty abatement request has been denied, most taxpayers have the right to appeal that decision.  Some of the penalties worked by the IRS Office of Appeals include:

1. Return Related Penalties2. Return Preparer Penalties3. Trust Fund Recovery Penalty4. FBAR Penalties

Collection Due Process (“CDP”) Hearings

A Collection Due Process (“CDP”) Hearing is an important tool in any tax collection case.  The law generally provides that:

Thus before the IRS can levy a taxpayer, they are provided the opportunity to appeal that determination and discuss with the Appeals Officer such things as appropriate spousal defenses (like innocent spouse claims), collection alternatives (like an offer in compromise or installment agreement), and in some cases even the underlying tax liability itself.

Collection Appeals Program (“CAP”)

Since the last 1990’s, the IRS has used an administrative appeals program for certain collection actions called the Collection Appeal Program (“CAP”).   A taxpayer can generally request a CAP hearing to challenge:

  • Levy or seizure action that has, or will be, taken.
  • A Notice of Federal Tax Lien (“NFTL”) that has been, or will be, filed.
  • The denial of a request to issue a lien subordination, lien withdraw, or lien discharge.
  • Rejection, proposed modification, or proposed termination of an installment agreement.
  • Disallowed wrongful levy claim.

Unlike a CDP Hearing, the administrative decision of the IRS Office of Appeals is final and cannot be appealed to the U.S. Tax Court.  A CAP is also unique because the IRS try to resolve the matter within only 5-days, as compared to a CDP case that can take months to resolve.

Offer in Comprise Rejection Appeals

An offer in compromise (“OIC“) is the ability to offer some lesser amount to compromise a greater tax liability.  After an initial offer in compromise is reviewed, an Offer Specialist may reject the offer; however, that rejection should come with appeal rights.  At the IRS Office of Appeals a taxpayer may be allowed to present reasons as to why the Offer Specialist’s conclusion was wrong.

Why McLaughlin Legal?

McLaughlin Legal is boutique San Diego law firm, with special emphasis on defending taxpayers and resolving tax disputes.  We have represented countless individuals and businesses in disputes with the IRS, FTB, BOE, EDD, CUIAB, and other taxing agencies.  We are committed to three overarching principals:

1. Concentrated Practice Areas2. Personalized Service3. Committed to Clients



Interested in Learning More? Interested in Learning More?
If you are interested in learning more about appealing an adverse tax decision, please feel free to contact us today for a free consultation.