Audit appeal

Every taxpayer has the right to appeal an IRS decision in an independent forum. This right is enshrined in the Taxpayer Bill of Rights and is administered by the IRS Independent Office of Appeals (formerly called the Office of Appeals).

49 steps across 12 sections

1. Decide Whether to Agree or Disagree

  • If you agree: Sign the examination report and pay the additional tax (or arrange payment).
  • If you partially agree: You can agree to some items and dispute others.
  • If you disagree: Do NOT sign. Proceed to file a protest or small case request.

2. File Your Protest or Small Case Request

  • Cases over $25,000: File a formal written protest (see detailed requirements below).
  • Cases $25,000 or under: File a Small Case Request using Form 12203, Request for Appeals Review.
  • Deadline: You generally have 30 days from the date on the 30-day letter.

3. Resolution

  • IRS position upheld — you owe the full proposed amount.
  • Your position upheld — the proposed adjustment is reduced or eliminated.
  • Compromise — the appeals officer recommends a settlement splitting the difference, often when facts or law are unclear.

4. The 30-Day Letter

  • What it is: An IRS letter (not a statutory notice) informing you of proposed changes from an audit and your right to appeal administratively.
  • Deadline: 30 days from the date on the letter to file a protest with the IRS Office of Appeals.
  • What happens if you miss it: The IRS issues a 90-day letter (Statutory Notice of Deficiency). You lose the opportunity for an administrative appeal before the case escalates.
  • Key fact: This is your first and best opportunity to resolve the dispute informally and inexpensively through the Appeals office.

5. The 90-Day Letter (Statutory Notice of Deficiency)

  • What it is: A formal legal notice (CP3219N, Letter 3219, or similar) required by law before the IRS can assess additional tax. This is sometimes called the "ticket to Tax Court."
  • Deadline: 90 days from the date on the notice to file a petition with the U.S. Tax Court (150 days if the notice is addressed to a person outside the United States).
  • What happens if you miss it: The proposed tax is assessed automatically. You lose the right to challenge the tax in Tax Court without paying first. Your only remaining option is to pay the full amount and then sue for a refund...
  • Weekend/holiday rule: If the 90th day (or 150th day) falls on a Saturday, Sunday, or legal holiday in the District of Columbia, the petition is timely if filed on the next business day.
  • Critical: This deadline is set by statute (IRC Section 6213) and CANNOT be extended by the IRS, by Appeals, or by anyone else. There is no "reasonable cause" exception.

6. Required Elements (per IRS Publication 5)

  • Your name, address, and daytime telephone number
  • A statement that you want to appeal the IRS findings to the Office of Appeals
  • A copy of the letter you received showing the proposed changes (or the date and symbols from the letter)
  • The tax period(s) or year(s) involved
  • A list of each proposed item you disagree with — be specific about which adjustments you contest
  • The reasons you disagree with each item
  • The facts that support your position on each item
  • The law or authority that supports your position (e.g., IRC sections, Treasury Regulations, court cases, revenue rulings) — note: you are encouraged but not strictly required to cite legal authority
  • A penalties of perjury statement: "Under the penalties of perjury, I declare that the facts stated in this protest and any accompanying documents are true, correct, and complete to the best of my k...
  • Your signature (and date)

7. Tips for an Effective Protest

  • Organize by issue — address each proposed adjustment separately.
  • Be factual and concise — emotional arguments are ineffective.
  • Attach supporting documents (receipts, bank statements, contracts, etc.).
  • Reference specific tax code sections and regulations when possible.
  • If using a representative, include a properly executed Form 2848 (Power of Attorney).

8. How to File

  • Use Form 12203, Request for Appeals Review.
  • Alternatively, prepare a brief written statement listing the items you disagree with and the reasons why.
  • The form is referenced in the 30-day letter you received.

9. Advantages

  • Much simpler than a formal written protest.
  • No penalties of perjury statement required.
  • No requirement to cite legal authority.
  • Just identify the disputed items and briefly explain your disagreement.

10. Important Notes

  • The $25,000 threshold is calculated per tax period, not in total.
  • If multiple tax periods are involved and ANY period exceeds $25,000, you must file a formal written protest for ALL periods.

11. Format Options

  • Telephone (most common)
  • Video conference
  • In person (at an IRS office)
  • Correspondence (for simple cases)

12. Timeline

  • After the IRS receives your protest, the case is transferred to Appeals.
  • An appeals officer typically contacts you within 45 days by mail to schedule the conference.
  • The entire appeals process from protest to resolution can take 3-12 months depending on complexity.

Common Mistakes

  • Missing the 90-day deadline
  • Ignoring the 30-day letter
  • Sending the protest to the wrong address
  • Filing an incomplete protest
  • Not bringing documentation to the appeals conference

Pro Tips

  • Respond to the 30-day letter even if you need more time
  • Request your IRS case file
  • The appeals officer thinks about "hazards of litigation."
  • You can present new evidence at Appeals
  • Consider Fast Track Settlement early

Sources

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