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IRS Independent Office of Appeals
Appeals is the one IRS office whose job is to settle.
Examiners and collectors apply the rules as they read them. Appeals officers are told to weigh the chance the government would lose and to resolve the case without litigation. Getting there takes the right request, filed on time.
The IRS Independent Office of Appeals is separate from the divisions that audit and collect. It hears audit disputes after a 30-day letter, Collection Due Process hearings after a final notice of intent to levy or a lien filing, Collection Appeals Program requests, rejected offers in compromise, penalty disputes, and trust fund recovery penalty proposals. Each has its own deadline, most of them 30 days, and some routes preserve the right to go to Tax Court while others do not.
Audit appeals
After an audit ends in disagreement, the 30-day letter invites a protest. If the total proposed for any one period is $25,000 or less, a short small case request is enough. Above that, a formal written protest is required: the facts, the law, and the reasons the examiner is wrong, signed under penalty of perjury.
Appeals can do something examiners cannot: settle on the hazards of litigation. If an issue is a 60/40 proposition in court, Appeals can concede 40 percent of it. That makes a well-argued protest worth real money even when the law is not entirely on your side.
Collection Due Process
A CDP hearing is available once per tax period after a final notice of intent to levy, and once after the first notice of federal tax lien filing. The request goes on Form 12153 within 30 days. A timely request generally suspends levy action, and the outcome can be reviewed by the Tax Court. A late request, made within one year, gets an equivalent hearing with no court review.
The Collection Appeals Program
CAP is faster and narrower. It covers a levy or seizure, a lien filing, and the rejection, modification, or termination of an installment agreement. You first ask for a conference with the collection employee's manager, then file Form 9423, generally within a few business days. Decisions often come within days. The trade-off is that CAP decisions are final, with no court review, and you cannot contest the underlying tax.
Other matters Appeals hears
- Rejected offers in compromise, within 30 days of the rejection letter.
- Penalty abatement denials.
- Proposed trust fund recovery penalties, within 60 days of Letter 1153.
- Innocent spouse determinations.
- Docketed Tax Court cases, which are routinely referred to Appeals for settlement before trial.
What happens if you miss the deadline
The consequence depends on the route. A missed 30-day letter leads to a notice of deficiency, which still allows a Tax Court petition. A missed CDP deadline costs you the levy suspension and court review. A missed offer appeal ends the offer. None of the deadlines can be restored by showing that the IRS was wrong.
When a lawyer matters
Appeals decides on the written record and the law. A protest that identifies the legal weaknesses in the examiner's position, and quantifies the litigation risk, gives the Appeals officer a reason and a basis to settle. Appeals officers also may not have private conversations about the merits with the employees who worked the case, and knowing those rules helps keep the process fair.
Official sources
The rules described on this page come from these primary sources. Check them, or the notice you received, for current figures and dates.
When to call
Look at your letter again if:
- It gives you 30 days to request a conference with Appeals.
- It is a final notice of intent to levy or a notice that a federal tax lien was filed.
- Your installment agreement was rejected or is about to be terminated.
- Your offer in compromise was rejected.
- You received Letter 1153 proposing a trust fund recovery penalty.
- A revenue officer's manager refused to change a levy or lien decision.
Common questions
Direct answers.
Is IRS Appeals really independent?
It is a separate office within the IRS that reports outside the examination and collection divisions. Appeals officers are generally prohibited from discussing the substance of a case with the originating employees without giving you a chance to participate.
How do I appeal an IRS audit?
Respond to the 30-day letter within 30 days. If the amount in dispute for each period is $25,000 or less, a small case request is sufficient. Otherwise, file a formal written protest stating the facts, the law, and your arguments.
What is the difference between a CDP hearing and the Collection Appeals Program?
A Collection Due Process hearing is requested on Form 12153 within 30 days of a final levy notice or lien filing notice. It generally suspends the levy and allows Tax Court review. The Collection Appeals Program is faster and covers more actions, but its decisions are final and cannot be taken to court.
Can Appeals reduce the amount I owe?
In audit cases, yes. Appeals can settle issues based on the hazards of litigation. In collection cases, Appeals decides whether the collection action is appropriate and can approve alternatives such as an installment agreement or an offer in compromise.
Does filing an appeal stop collection?
A timely Collection Due Process request generally suspends levy action for the periods involved. Other appeals do not automatically stop collection, although the IRS usually holds off on levies while a Collection Appeals Program request is pending.
How long does an IRS appeal take?
Collection Appeals Program decisions often come within days. Collection Due Process hearings and audit appeals commonly take several months to a year, depending on the office's workload and the complexity of the case.
Related problems
IRS notices rarely arrive alone.
Federal Tax Lien
A tax lien does not take anything. It attaches to everything you own and tells the world the IRS is first in line. There are four ways to deal with it.
Read more →Payroll Tax & Trust Fund Penalty
Withheld payroll taxes belong to the government from the moment of the paycheck. If the company does not pay them, the IRS assesses the full amount against the people who could have.
Read more →Unfiled Tax Returns
The IRS will not approve a payment plan, an offer, or a hardship status until the missing returns are filed. It may also have filed versions of its own, with no deductions.
Read more →IRS Penalty Abatement
Penalties are often a quarter or more of an old IRS balance, and they are the most negotiable part. A clean three-year history can remove one year's penalties for the asking.
Read more →Innocent Spouse Relief
A joint return makes each spouse liable for all of the tax, and a divorce decree does not change that. Federal law provides three forms of relief, and Texas community property adds a fourth question.
Read more →IRS Installment Agreements
A payment plan is the most common way out of IRS collection. The size of the balance decides how much the IRS asks about your finances, and the terms decide whether you can keep it.
Read more →Next step
The letter names the route. The date decides whether it is still open.
Send the letter and what led up to it.