The Internal Revenue Service launched a pilot virtual appeals program on August 1, 2017. This program will potentially allow IRS Appeals Office staff, taxpayers, and their representatives to hold a “face to face” meeting—by way of a secure, web-based video conference.
Benefits of the New IRS Virtual Appeals Program
According to the IRS’ statement announcing the program launch, the IRS expects the new technology to be especially useful for taxpayers who aren’t located near an IRS Appeals Office. It will be useful for those who want a more intimate setting or interactive engagement than a phone meeting allows. While the technology is currently available to a limited test audience, the IRS’ statement expresses its desire to use technology to support the modern needs of the more than 100,000 taxpayers who are involved in an appeal and want to resolve their tax dispute out of court.
Understanding Your Rights and Options
While the technology provides the potential for greater efficiency and flexibility in the Appeals process, it’s important that taxpayers remember that they have several rights when involved in a tax-related dispute with the IRS—and options when it comes to how to exercise them.
For example, if you are contacted by the IRS regarding a tax-related matter and you do not agree with the findings, you have the right to request a meeting with the person who contacted you–and to escalate the matter to that person’s supervisor. If you and the IRS are unable to reach an agreement on the tax-related matter following this meeting, you have the right to appeal your case directly to your local Appeals Office of the IRS to avoid court proceedings.
Hiring a Licensed Tax Professional to Help Appeal
Though Appeals Office conferences are “informal” according to the IRS and do not require that you secure formal representation, negotiating any matter related to your taxes with the IRS can be intimidating. This may be the case even if you feel strongly that the IRS’ determination is incorrect and have the documentation to support your point of view.
Because you have the right to hire formal representation, which may be an attorney, a certified public accountant, or an enrolled agent—it may be in your best interest to stack all possible odds in your favor–if only to know that a professional who understands tax law is on your side. (Forbes points out that while it’s typically less expensive to represent yourself in a tax appeal—it also tends to be less effective).
The representative you hire can appear alongside you at the Appeal meeting—whether held over the phone, in person, or as part of the new virtual conference technology—or on your behalf, with a completed Power of Attorney.
If you are the prevailing party following the appeal, you may be able to pursue reimbursement for expenses related to it—though there are limitations surrounding what costs you can try to recover. For example, the IRS specifies that you can seek only “reasonable amounts” for court costs, administrative fees, costs of studies and analysis to support your case. The IRS’ also states that attorney fees generally cannot exceed $125 per hour (the potential reimbursement for which you may qualify may be indexed for a cost of living adjustment).
Other Options if an Appeal Doesn’t Go Your Way
If you aren’t able to reach a resolution during your appeal, all hope is not lost. You’ll receive an IRS Notice of Deficiency via certified mail, and have 90 days to respond—or potentially, continue the dispute. You or your tax representative can file a Tax Court petition, and pick the city where you want your case to be heard by a Tax Court judge.
If you are looking to connect with a tax professional who has experience resolving tax problems, leverage the search on our homepage (taxcure.com).