What is the IRS Appeals Division?

On July 22nd, 1998, President Clinton signed the IRS Reform and Restructuring Act which made significant changes to the internal organization of the IRS. One of the most notable provisions of this measure was the establishment of the IRS appeals division. The appeals division was established as a fair and impartial way for taxpayers or their representatives to negotiate the settlement of tax disputes outside of the Examinations and Collections Divisions of the IRS. Appeals resolves over 100,000 cases per year and handles a variety of matters including audit decisions, innocent spouse claims, adverse collection actions (liens, levies, and seizures), penalty disputes, installment agreements, and offers in compromises.

Going to appeals has several advantages. First, because of the independence of appeals, taxpayers often obtain more favorable results. Appeals officers are measured by how quickly they resolve disputes rather than the amount of tax the collect. They have an incentive to resolve cases quickly, rather than collect the most money possible, and are often more open to compromise. The mind set of an Appeals Officer, rather than that of a Revenue Officer or Revenue Agent, usually makes a big difference in working to resolve the process quickly. Furthermore, it usually takes a month or two for the case to be transferred to the appeals division. This time period can be used as a tactic to stall collections, save more money to settle your liability, or strategize before your appeals conference. Once in appeals, your appeals officer has the authority to settle cases on the spot.