10 strategies at appeals

YOUR case was closed unagreed and have decided to bring your case before the appeals office of the IRS. You have learned the basics of the appeals process and how to prepare for the conference from my prior articles. Let me now give you 10 strategies as you meet face-to-face with the Appeals Officer:

1. Respect the Appeals Officer. The appeals officer is not the enemy. The officer is here to help settle your case. The new IRS gives him/her even more new authority to resolve your case. Don’t fight him (includes her).

2. Be credible. It is the most important single element in settling your case. Be honest and forthright with him. Even the best arguments, citations, and documentation won’t be effective if you lose credibility during the conference.

3. Be reasonable. Heated arguments lead you nowhere. Threats or ultimatums backfire and merely lead you to more trouble. This is not the time to be bullheaded. This is not the forum to be combative.

4. Be prepared to compromise. Remember that the purpose of the conference is to settle your case—not to bully for a win.

5. Be subtle as you control the tempo of the conference. Suggest, not demand, the manner in which the conference is conducted. It is not in your best interest to be pushy.

6. First address issues that are easiest to resolve and hope to establish a pattern that will carry over to the rest of the conference. Again, your objective is a quick resolution. Starting with the most complicated issue may get you stuck, unable to move on, and diminish your chances for a good resolution.

7. Present all your evidence that are in your favor. Federal rules of evidence do not apply to appeals conferences.

8. Analyze the strengths and weaknesses of the government’s position. This will guide you when to attack issues, when to step back, when to extend an olive branch. Hopefully, the end game will be peaceful.

9. Help the Appeals Officer build your case so he can help back you up in his written report to his superiors. In my experience, Appeals Officers feel for taxpayers but sometimes do not have tools to help deserving taxpayers. Submit persuasive documents such as cancelled checks and thank you letters to support donations, floor plans to support your office at home, or recent tax court cases to support your side of the issues.

10. Learn how the appeals process works. Learn how to gather, research, file, and prepare adequately. Get a coach to guide you through the survival process.

When things get tough, emphasize the hazards of litigation. You can lose all the issues if you proceed to court. So can the IRS.  Good day!

Additional TIPS:

• Don’t be fixated on resolving case at the examination level. Have an open mind for appeals.

• Appeals Officers are realists. They are conscious of hazards of litigation. Your case could set a bad precedent for future cases if they lose. They don’t want that.

• Interject doubt in officer’s mind that IRS could lose in court.

• Help the officer help you. Feed data to help justify arguments in your favor. Their work is reviewed by their managers so any assistance to build your case from you is welcome.

• If you owe less than$25,000, have your appeals treated as a small case for quicker disposition. Write “Small Case Request” on top of your protest letter. Small cases are often sent back to appeals for settlement even before sent to IRS lawyers (district counsels).

• Ask auditor for copy of notes and workpapers under Freedom of Information Act (FOIA).

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Victor Santos Sy graduated Cum Laude from UE with a BBA and from Indiana State University with an MBA. Vic worked with SyCip, Gorres, Velayo (SGV – Andersen Consulting) and Ernst & Young before establishing Sy Accountancy Corporation in Pasadena, California. 

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He has 50 years of experience in defending taxpayers audited by the IRS, FTB, EDD, BOE and other governmental agencies.  He is publishing a book on his expertise – “HOW TO AVOID OR SURVIVE IRS AUDITS.” Our readers may inquire about the book or email tax questions at [email protected].

Victor Sy, CPA, MBA (retired)

Victor Santos Sy, MBA. CPA (Retired) Victor Santos Sy graduated Cum Laude from UE with a BBA and from Indiana State University with an MBA. Vic worked with SyCip, Gorres, Velayo (SGV – Andersen Consulting) and Ernst & Young before establishing Sy Accountancy Corporation. * * * He retired after 50 years of defending taxpayers audited by the IRS, EDD, BOE and other governmental agencies. He published a book on “How to Avoid or Survive IRS Audits” that’s available at Amazon. Readers may email tax questions to [email protected].

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