Individual and business: you have the right to appeal an IRS decision in an independent forum and be heard.

The Internal Revenue Service (IRS) would like you to know that you have rights when you’re dealing with them on a personal or business tax matter.

The IRS examined your income tax return for completeness and accuracy. During the examination the IRS proposes additional tax. You disagree with the additional tax assessed. You have the right to raise objections.

Let’s go over how you may successfully raise objections to an IRS decision.

FAST TRACK SETTLEMENT (FTS) – NONJUDICIAL RESOLUTION

Objectives

This is an alternative dispute resolution (ADR) process. The objective is to resolve your matter fairly and impartially in an expeditious manner. An Appeals employee, specially trained, tries to facilitate an agreement between you and the IRS. You may withdraw from the FTS process at any time and leverage your traditional appeal rights if you were not able to resolve any of the issues with the IRS.

For you to be able to request an FTS, the disputed issue must be fully developed, and the IRS must agree to participate in this process.

Administrative appeal with the IRS Independent Office of Appeals.

• If the additional assessment including penalties for each tax period involved is $25,000 or less, you may make a small case request instead of filing a formal written protest.
• If the additional assessment including penalties for each tax period involved is more than $25,000, you must file a formal written protest.
• If the assessment of additional tax involves your partnership or S Corporation tax return, you must file a formal written protest regardless of the dollar amount.

You must present your arguments to Appeals based on the tax laws for consideration. Appeals will reject your arguments if they’re based on moral, religious, political, constitutional, conscientious, or similar objections to the assessment or payment of Federal taxes.

COURT ACTIONS

You may take court actions under any of the following circumstances:

• You do not use fast track settlement;
• You do not appeal your case with Appeals;
• You were unable to reach a settlement with Appeals.

The IRS should have sent you a determination letter that informs you that you have the right to petition the Court. You must meet the court’s procedural and jurisdictional requirements.

You may decide to file a complaint with one of the following courts: U.S. Tax Court, U.S. District Court, U.S. Court of Federal Claims.

U.S. Tax Court

You may dispute the assessment before the U.S. Tax Court prior to making full payment. Be sure to file your petition with the U.S. Tax Court within the timeframe specified in the notice. If you’re in the U.S., you typically have 90 days. If you’re outside the U.S., you usually have 150 days.

U.S. District Court

If you’re living in the U.S., you can take your case to the U.S. District Court in the judicial district where you reside.

• You must have fully paid the amount of the additional assessment and timely filed a claim for refund with the IRS;
• You mustn’t have received from the IRS a written response on your claim 6 months after you filed the claim for a refund.

U.S. Court of Federal Claims

If you’re living outside of the U.S., you can take your case to the U.S. Court of Federal Claims.

Recovering administrative and litigation costs

If you win and meet other requirements, the Court may ask the IRS to reimburse you the administrative and litigation costs that you paid. To make a determination, the Judges will for instance take into account your level of income.