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Compromise. The IRS may accept your offer for any of the

ences with Appeals Office personnel are held in an infor-

following reasons.

mal manner by correspondence, by telephone, or at a

personal conference.

•

There is doubt about the amount you owe (or

If you want an appeals conference, follow the instruc-

whether you owe it).

tions in the letter you received. Your request will be sent to

•

There is doubt as to whether you can pay the

the Appeals Office to arrange a conference at a convenient

amount you owe based on your financial situation.

time and place. You or your representative should be

•

prepared to discuss all disputed issues at the conference.

An economic hardship would result if you had to pay

Most differences are settled at this level.

the full amount owed.

If agreement is not reached at your appeals conference,

•

Your case presents compelling reasons that the IRS

you may be eligible to take your case to court. See Appeals

determines are a sufficient basis for compromise.

to the Courts, later.

If your offer is rejected, you have 30 days to ask the

Protests and Small Case Requests

Appeals Office of the IRS to reconsider your offer.

The IRS offers fast track mediation services to

When you request an Appeals conference, you may also

TIP

help taxpayers resolve many issues including a

need to file either a formal written protest or a small case

dispute regarding an offer in compromise. For

request with the office named in the letter you received.

more information, see Publication 3605.

Also, see the special appeal request procedures in Publi-

Generally, if you submit an offer in compromise, the IRS

cation 1660. In addition, for the appeal procedures for a

will delay certain collection activities. The IRS usually will

spouse or former spouse of a taxpayer seeking relief from

not levy (take) your property to settle your tax bill during the

joint and several liability on a joint return, see Rev. Proc.

following periods.

2003-19, which is on page 371 of the Internal Revenue

Bulletin 2003-5 at

•

While the IRS is evaluating your offer in compro-

mise.

Written protest. You need to file a written protest in the

•

following cases.

The 30 days immediately after the offer is rejected.

•

While your timely-filed appeal is being considered by

All employee plan and exempt organization cases

Appeals.

without regard to the dollar amount at issue.

•

Also, if the IRS rejects your original offer and you submit a

All partnership and S corporation cases without re-

revised offer within 30 days of the rejection, the IRS gener-

gard to the dollar amount at issue.

ally will not levy your property while it considers your

•

All other cases, unless you qualify for the small case

revised offer.

request procedure, or other special appeal proce-

For more information about submitting an offer in com-

dures such as requesting Appeals consideration of

promise, see Form 656.

liens, levies, seizures, or installment agreements.

If you must submit a written protest, see the instructions

Appeal Rights

in Publication 5 about the information you need to provide.

The IRS urges you to provide as much information as you

can, as it will help speed up your appeal. That will save you

Because people sometimes disagree on tax matters, the

both time and money.

Service has an appeals system. Most differences can be

settled within this system without expensive and time-con-

Be sure to send the protest within the time limit

suming court trials.

specified in the letter you received.

However, your reasons for disagreeing must come

CAUTION

within the scope of the tax laws. For example, you cannot

appeal your case based only on moral, religious, political,

constitutional, conscientious, or similar grounds.

Small case request. If the total amount for any tax period

In most instances, you may be eligible to take your case

is not more than $25,000, you may make a small case

to court if you do not reach an agreement at your appeals

request instead of filing a formal written protest. In figuring

conference, or if you do not want to appeal your case to the

the total amount, include a proposed increase or decrease

IRS Office of Appeals. See Appeals to the Courts, later, for

in tax (including penalties), or claimed refund. If you are

more information.

making an offer in compromise, include total unpaid tax,

penalty, and interest due. For a small case request, follow

Appeal Within the IRS

the instructions in our letter to you by sending a letter:

•

You can appeal an IRS tax decision to a local Appeals

Requesting Appeals consideration,

Office, which is separate from and independent of the IRS

•

Indicating the changes you do not agree with, and

office taking the action you disagree with. The Appeals

•

Office is the only level of appeal within the IRS. Confer-

Indicating the reasons why you do not agree.

Page 8

Publication 556 (Rev. August 2005) - Examination Of Returns, Appeal Rights,and Claims For Refund Page 8

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