The Appeal Station

The one room where litigation risk counts

The IRS Independent Office of Appeals does something no examiner and no collection officer can do: it can settle a case on the hazards of litigation — a clear-eyed estimate of how the dispute would actually come out in court, and a willingness to split the difference accordingly.

An examiner applies the law as the IRS reads it. Appeals asks a different question — what is the realistic chance the government would lose, and what is that risk worth? Its statutory independence (IRC §7803(e)) is the whole point. It is why the great majority of disputes that reach it are resolved there, without a courtroom.

Getting in — the door depends on where you came from

Appeals is fed from more than one station, and the entry form differs by source.

• From an examPART 2

  An unagreed audit produces a 30-day letter. The response is a formal written protest where the proposed change for the period exceeds $25,000, or the shorter Form 12203 small-case request at or below that threshold.

• From collectionPART 5

  A final notice of intent to levy, or a lien filing, carries Collection Due Process rights — a hearing requested on Form 12153 within 30 days. A faster, narrower alternative is the Collection Appeals Program (Form 9423), which reaches liens, levies, seizures, and installment-agreement terminations — but produces no right to judicial review.

• A rejected offerPART 6

  When an offer in compromise is turned down, the rejection can be appealed on Form 13711 within 30 days.

The conference

An Appeals conference is informal — typically one Appeals officer, by phone or in writing, with no examiner across the table. The taxpayer's job is to make the litigation risk visible: the unsettled law, the missing third-party proof, the sympathetic facts. That is the currency Appeals is authorized to trade in.

Getting out

• Agreement

  A settlement is memorialized on Form 870-AD — an offer of waiver Appeals accepts — or, where the matter warrants binding finality, a Form 906 closing agreement. The tax is assessed on the agreed terms and the matter closes.

• No agreement, exam sidePART 7

  If the audit issues can't be resolved, the IRS issues a Statutory Notice of Deficiency — and the 90-day clock to the Tax Court begins.

• No agreement, collection sidePART 7

  If a CDP matter can't be resolved, Appeals issues a Notice of Determination (Letter 3193), reviewable in the Tax Court within 30 days under §6330(d)(1).

Why this station matters

Appeals is the last place a dispute can be resolved on its merits without the cost, delay, and exposure of litigation — and the only place the government will price its own risk. A protest that frames that risk well is worth more than one that simply re-argues the audit. Done right, this is where most matters should end.