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Audit appeals could give you a tax advantage

Handling taxes can make anyone anxious as finances and dealing with a government institution can both induce stress. Even if you have completed your tax forms and filed them to the best of your ability, you may still fear that the IRS will find issue with your return and conduct an audit. If you do find yourself in this situation and the results of the audit indicate that you owe more money to the government, you may wish to review the results further.

Rather than simply accepting the outcomes of the audit, you do have the option of filing for an appeal. Certain advantages and disadvantages exist relating to this approach, but with the right help, you may have the opportunity to reverse the audit decision and improve your situation.


One advantage to filing for an appeal relates to the ease of the process. A separate division of the IRS exists solely for addressing audit appeals. The IRS Office of Appeals employs individuals to review reports and hear your arguments for disagreeing with the audit findings. In many cases, the appeal results in a reduction or complete elimination of additional taxes and penalties.

Additionally, if you choose to move forward with an appeal, the due date of your additional taxes and penalties postpones until the end of your appeals process. Therefore, you gain more time to come up with the funds necessary for making any payments that remain after the appeal. Of course, that time period depends on the specific nature of your appeals case, but on average, the process has a relatively speedy duration.


One disadvantage to filing an appeal also relates to your delayed payment deadline. During your appeals process, interest and penalties will accrue on your owed payment. As a result, if your appeal attempt proves unsuccessful, you will have to pay the balance determined in the original audit report as well as any interest and fines accumulated.

Furthermore, the chance exists that during the appeal, the reviewer could find an additional discrepancy missed in the original audit. This outcome could also result in your owing more money than determined in the initial audit report.

Legal options

You also have the option to pursue a legal claim through the U.S. Tax Court. This avenue could prove more beneficial if you know that an additional discrepancy on your tax forms exists. In court, the proceedings address only the originally found issues.

In order to ensure that you understand your appeals options, you might want to consult with an experienced California attorney. This professional can provide you with insight into appeals proceedings and review your tax documents and audit results to determine your best course of action.

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