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The complexity of navigating IRS appeals

When a taxpayer disagrees with a decision the Internal Revenue Service made in a tax matter involving them, one avenue they might have available is to pursue an appeal. IRS appeals can be very complex matters. One reason for this is the plethora of rules and practices the IRS has regarding the handling of such cases. Among these are practices regarding who within the IRS has the authority to make certain decisions, like settlement decisions, in matters related to appeals.

Recently, there has been speculation that IRS Appeals might make a change to its settlement authority practices in certain types of cases. The cases in question deal with particularly complex issues and particularly high-dollar amounts. Currently, settlement authority in such cases lies with 35 Appeals team case leaders. It is thought that the IRS may soon change this so that the authority is only with the managers of these leaders, which is a much smaller group.

The IRS has said it is looking into its practices regarding settlement authority. It says it is doing this in response to a Treasury Inspector General for Tax Administration report from last year. This report pointed out some issues regarding the handing of cases involving penalty appeals.

Some worry that if the speculated change does happen, it will have negative affects in the appeals process. One concern some have leveled is that the change could lead to bottlenecks in the process and delays in settlements.

One wonders if the speculated change will occur. If it does, one wonders if it will lead to any further or wider-ranging changes in settlement authority practices by IRS Appeals.

Where authority lies for different IRS decisions in their case can be a very impactful issue for a person when pursuing an appeal. It is one of the many details that can affect what kind of approach a taxpayer may want to take in the appeals process. This underscores that there are a lot of different things it can be important for a taxpayer to be properly informed on when navigating an appeal. So, a knowledgeable tax law attorney’s guidance can be a crucial thing to have when appealing an IRS decision.

Source: Bloomberg BNA, “IRS Appeals May Put Settlement Authority in Fewer Hands,” Dolores W. Gregory and Erin McManus, Oct. 6, 2016

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