How to Appeal an IRS Tax Decision in 2025

Introduction

If the IRS issues a tax decision that you disagree with, you have the right to appeal the decision through the IRS Independent Office of Appeals. The IRS appeals process allows taxpayers to challenge tax assessments, penalties, audits, and other IRS actions without going to court.

Understanding the IRS appeals process, your legal rights, and the required IRS forms can help you resolve disputes efficiently and avoid unnecessary tax liabilities. This article provides a step-by-step guide on how to appeal an IRS decision in 2025, along with real-life examples, compliance tips, and key deadlines.

What IRS Decisions Can Be Appealed?

Under IRC § 7803(e), taxpayers have the right to appeal most IRS decisions, including:

• Audit Determinations – If you disagree with the outcome of an IRS audit.
• Tax Penalties – Disputes over late filing penalties, accuracy-related penalties, or failure-to-pay penalties.
• Tax Assessments – If the IRS increases your tax liability based on an examination.
• Offer in Compromise (OIC) Rejections – If the IRS denies your request to settle tax debt for less than owed.
• Levies and Liens – If the IRS places a lien on your property or attempts to seize assets for unpaid taxes.
• Innocent Spouse Relief Denials – If your request for relief from a spouse’s tax debt is denied.

Exceptions: The IRS does not allow appeals for frivolous tax positions, criminal tax cases, or issues already ruled on in tax court.

How to File an Appeal with the IRS

The IRS Office of Appeals is separate from the IRS enforcement division and provides an impartial review of tax disputes.

Step 1: Review Your IRS Notice

• The IRS will send an official notice explaining its decision (e.g., Notice of Deficiency, CP2000, or Letter 525).
• Identify the issue being disputed, the amount in question, and the deadline to appeal.

Step 2: Respond Within the Appeal Deadline

• Most IRS decisions must be appealed within 30 days of the notice date.
• If appealing a Notice of Deficiency, taxpayers have 90 days to file a petition with the U.S. Tax Court.

Step 3: File the Correct IRS Form

Use the appropriate form based on the type of appeal:

Step 4: Submit a Written Protest (For Cases Over $25,000)

If disputing more than $25,000, you must file a formal written protest explaining:

• Why you disagree with the IRS decision
• Facts and laws supporting your position
• A signed declaration under penalty of perjury

For cases under $25,000, taxpayers can use Form 12203 for a simplified appeal.

Step 5: Attend the IRS Appeals Conference

• The IRS Office of Appeals may conduct a phone or in-person hearing.
• Taxpayers can represent themselves or hire a CPA, Enrolled Agent, or tax attorney.
• If the appeal is successful, the IRS will adjust your tax liability accordingly.

Step 6: Take Further Legal Action If Necessary

If the IRS Office of Appeals denies the appeal, taxpayers can:

• File a petition with the U.S. Tax Court (within 90 days of a Notice of Deficiency).
• Pursue litigation in U.S. District Court or the Court of Federal Claims for refund claims.

Example: How a Small Business Owner Appealed an IRS Tax Penalty

• Case: Michael, a self-employed consultant, was assessed a $5,000 failure-to-file penalty after filing his tax return late.
• Action Taken: He submitted Form 843, explaining that a medical emergency prevented timely filing.
• Outcome: The IRS accepted his appeal and removed the penalty, saving him $5,000.

Common Mistakes to Avoid When Filing an IRS Appeal

• Missing the appeal deadline – Appeals must be filed within 30 or 90 days, depending on the notice type.
• Failing to provide supporting evidence – Appeals require bank statements, tax records, or legal documentation.
• Not consulting a tax professional – Taxpayers with complex disputes should seek CPA or EA assistance.
• Ignoring alternative resolution options – The IRS Fast Track Mediation program may resolve disputes within 60 days.

What Are the Chances of Winning an IRS Appeal?

According to IRS data, taxpayers win or partially settle approximately 50-60% of appeals. Success rates depend on:

• Strength of legal arguments
• Supporting documentation
• Previous compliance history

Conclusion

Taxpayers have the legal right to appeal IRS tax decisions when they disagree with an assessment, penalty, or audit outcome. The IRS appeals process provides an impartial review, allowing disputes to be resolved without litigation.

To increase your chances of a successful appeal, schedule a consultation with Anshul Goyal, CPA EA FCA for expert tax guidance. Book an appointment here:

About Our CPA

Anshul Goyal, CPA EA FCA is a licensed Certified Public Accountant (CPA) in the United States, an Enrolled Agent (EA) admitted to practice before the IRS, and a cross-border tax expert. He specializes in IRS compliance, tax litigation, and assisting American businesses and Indian expatriates in managing U.S. tax obligations.

Frequently Asked Questions (FAQs)

1. How long do I have to appeal an IRS tax decision?

Most IRS appeals must be filed within 30 days of receiving a notice. However, for Notices of Deficiency, taxpayers have 90 days to file with the U.S. Tax Court.

2. Can I appeal an IRS tax penalty?

Yes. Taxpayers can use Form 843 (Claim for Refund and Request for Abatement) to request the removal of late payment or accuracy-related penalties.

3. What if I miss the IRS appeal deadline?

If the appeal deadline passes, you may request an audit reconsideration or file a petition in tax court under IRC § 6213.

4. How long does the IRS appeals process take?

The process usually takes 4-6 months, but complex cases may take over a year. Expedited options like Fast Track Mediation may resolve disputes within 60 days.

5. Can I represent myself in an IRS appeal?

Yes, but taxpayers with complex cases should seek help from a CPA, Enrolled Agent, or tax attorney to improve their chances of success.