What the Appeals office is, and is not
The IRS Independent Office of Appeals is separate from the examination function, and its job is to resolve disputes without a trial. Appeals officers typically weigh the hazards of litigation, meaning they consider how a court might view each side's position rather than simply repeating the examiner's conclusions. That makes an appeal a negotiation grounded in the law and the facts, not a rehearing of every audit conversation. Appeals generally does not raise new issues of its own, although it may send newly submitted evidence back to the examiner for comment. Rules on ex parte communications limit how Appeals and the examination team discuss your case without you.
Building the protest
For larger proposed changes a written protest is usually required, and it should state what you disagree with and why, issue by issue. Smaller cases may qualify for a simpler request. The protest is where documents the examiner did not accept, or never saw, get organized and explained, so gather the audit report, the information document requests with your responses, and any workpapers prepared by your accountant. If the period for assessment is close to running out, the IRS may ask you to sign an extension before Appeals takes the case, and that request deserves a careful look rather than an automatic signature. Missing the protest deadline does not end your options, but it usually means the next step is a notice of deficiency and a different, stricter timetable.
Deciding whether Appeals is the right stop
Some taxpayers go straight to Tax Court after a notice of deficiency, and even then the case is often referred to Appeals for settlement discussions. When we review a case, we compare the examination report with your records and separate the adjustments that are factual from those that turn on how the law applies. We look at whether penalties were proposed and whether there are grounds to contest them on their own. We also ask whether the same issue appears in other years or on a state return, because a settlement in one place can shape positions elsewhere. Then we can talk about what an appeal would involve and what it would ask of you in time and cost.
