So You Disagree With Your Auditor’s Findings…

You’ve gone through a tax audit, put up with the IRS auditor’s seemingly endless requests for information, and his or her conclusions arrive one day in your mail — including the amount of the tax deficiency (and interest and penalties) which the auditor has computed.

And let’s just assume that you don’t agree with the auditor’s findings — what next?

The most common “next step” is a plea to the Appeals Office within IRS. This office is often able to reach a settlement with you, without your having to resort to the more costly and protracted judicial remedies available to you.

The Appeals Office is separate from, and independent of, the IRS office taking the action with which you disagree. Conferences with Appeals Office personnel are informal in nature, and in some cases can even by completed via telephone. And you can represent yourself, though such is not generally a good idea for a variety of reasons — let your tax pro handle it for you.

(Check out the Pros and Cons of Appealing an IRS Audit.)

If you request the intervention of the Appeals Office, you usually will first have to file a formal written “protest,” outlining the background of your case, and your position in the matter. And if, ultimately, you still can’t come to a palatable resolution of your case, you can still forge ahead to the U.S. Tax Court, the Court of Federal Claims, or your U.S. District Court. Before making this decision, however, consider the costs (including the time to be consumed out of your remaining life expectancy!) as opposed to be benefits which may arise if you are successful. And be sure to include the legal fees in your calculations, inasmuch as legal representation will probably be a must at this point.