Appeals Conference

Appeals conference is a term for the conference that a taxpayer can request with the Internal Revenue Service during the audit process. The taxpayer opens or asks for an appeals conference if the taxpayer disagrees with the results of an IRS audit

An appeals conference is sometimes a step in the audit process if the taxpayer disagrees with the IRS agent’s findings on their case. In order to call an appeals conference, the taxpayer must first meet with an IRS supervisor and attempt to resolve the issue.

If the preliminary audit was done via correspondence or in an IRS office, or concerns an amount less than $25,000, the appeals conference does not need to be a formal written protest or a detailed, signed statement about the taxpayer's disagreement.  Instead, the taxpayer must file what the IRS calls a small case request, a brief written statement outlining why the taxpayer disagrees with the IRS. Taxpayers either represent themselves at the conference or hire an attorney, accountant or enrolled agent to represent them instead. The conference itself is fairly informal, and taxpayers can make their case any way they see fit.

If an appeals conference appeals the finding of an IRS tax audit, what exactly is a tax audit?  An IRS audit is a scrutiny of an individual’s or organization’s tax records and financial information to make sure that the tax amount and information reported is accurate. The fear around a federal tax audit by the IRS works as a good enough reason for people to stay honest and pay taxes on time. However, timely and correct tax payments do not guarantee that you will not be audited, nor does it mean that a return which is selected for audit is sure to have an error.

The IRS has a separate branch of service called the Office of Appeals, which consists of approximately 2,000 employees located nationwide. Most of them were auditors themselves, at one time, but are now senior employees in the IRS system, and they usually have legal or accounting experience. Their sole function is to review finished examination reports and provide an impartial platform for taxpayers to plead their cases to a higher power within the IRS.

According to the IRS, there are different methods used to select which returns will be audited. As opposed to popular ideas on the subject, there are a few triggers that are likely to land you on an auditor’s list. The IRS uses a computer to make selections based on a statistical formula that takes into account a myriad of variables including mismatched documents, if the information reported in Form 1099 or W-2 doesn’t match for example; an individual’s failure to sign the returns; if an individual takes the Home Office deduction and income thresholds.