When a tax dispute with the Internal Revenue Service cannot be resolved at the audit stage, the next step is often IRS Appeals.

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At this stage, outcomes are no longer driven solely by the examining agent’s position—they are shaped by litigation risk, legal interpretation, and strategic presentation.

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We represent businesses and individuals in IRS Appeals proceedings, focusing on resolving disputes efficiently while preserving leverage.

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What Is IRS Appeals?

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IRS Appeals is an independent function within the IRS that reviews disputes arising from audits. Its purpose is to resolve cases without litigation, based on the hazards of litigation—the likelihood that either side would prevail in court.

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This creates opportunities for resolution that are not available during the examination phase.

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What an IRS Appeals Attorney Does

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An IRS Appeals attorney does more than present legal arguments. Effective representation requires:

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• Framing issues in terms of litigation risk

• Developing a persuasive administrative record

• Identifying settlement opportunities

• Positioning the case for negotiation or escalation

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We work with clients to ensure that their case is presented in a way that aligns with how Appeals Officers evaluate disputes.

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When Should You Go to IRS Appeals?

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Not every case benefits from going to Appeals. The decision is strategic.  In some situations, seeking advance certainty through a Private Letter Ruling may reduce risk before a position is taken.  For multinational taxpayers, proactively resolving transfer pricing issues through an Advance Pricing Agreement can avoid disputes before they arise.

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Appeals May Be Appropriate When:

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• The law is subject to interpretation

• There is relevant case law with mixed outcomes

• A negotiated resolution is preferable to litigation

• The financial exposure is significant

 

Appeals May Not Be the Right Path When:

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• The issue is purely factual and unfavorable

• A precedent-setting outcome is required

• The administrative record is incomplete

 

Entering Appeals at the wrong time can materially affect the outcome.

 

The IRS Appeals Process (Step-by-Step)

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Understanding the process is critical to maintaining leverage.

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1. Audit Concludes

The IRS issues proposed adjustments.

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2. Protest Is Filed

A formal protest outlines legal and factual disagreements.

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3. Case Is Transferred to Appeals

An Appeals Officer is assigned.

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4. Appeals Conference

The parties discuss the case, focusing on litigation risk.

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5. Resolution or Escalation

The case is either settled or proceeds toward litigation (e.g., Tax Court).

Each stage presents strategic decisions that can influence the final outcome.

 

Common Mistakes in IRS Appeals

 

Many taxpayers—and even experienced advisors—undermine their position by:

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• Entering Appeals without a fully developed record

• Treating Appeals as an extension of the audit

• Failing to frame arguments in terms of litigation hazards

• Overlooking settlement dynamics

 

These missteps can reduce negotiating leverage and limit options.

 

IRS Appeals vs. Tax Court

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One of the most important strategic decisions is whether to resolve a case in Appeals or proceed to litigation.

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Appeals
 

• Faster resolution

• Lower cost

• Flexible outcomes

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Tax Court
 

• Formal legal process

• Potential for precedent

• Higher cost and longer timeline

 

The right approach depends on the facts, legal issues, and overall objectives. In certain cases, obtaining advance guidance through a Private Letter Ruling may be preferable to resolving uncertainty through Appeals or litigation

 

Our Approach to IRS Appeals

 

We focus on early positioning and strategic clarity:

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• Evaluating whether Appeals is the right forum

• Developing the strongest possible administrative record

• Aligning legal arguments with litigation risk

• Identifying opportunities for efficient resolution

 

In high-value disputes, preparation before entering Appeals often determines the result.

 

Who We Represent

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We advise:

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• Closely held and middle-market businesses

• Multinational companies

• High-net-worth individuals

• Tax directors and in-house counsel

 

Frequently Asked Questions

 

Do I need an attorney for IRS Appeals?

 

While not required, IRS Appeals involves legal analysis, negotiation strategy, and risk assessment. Representation can significantly affect outcomes in complex or high-value matters.

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How long does IRS Appeals take?

 

Timelines vary depending on complexity, but cases often take several months to over a year.

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Can you settle with IRS Appeals?

 

Yes. Appeals is designed to resolve disputes through negotiated settlement based on litigation risk.

 

Schedule a Consultation

 

If you are considering IRS Appeals or evaluating your options following an audit, early assessment can materially affect your position.  Contact Zion Levi, Esq. today to discuss your situation and next steps.