Charity and Nonprofit Audits: Appeal Rights and Procedures
The Appeal System
Because people sometimes disagree on tax matters, the IRS has an appeal system. Most differences can be settled within this system without going to court.
Appeal Within the IRS
The tax decision reached by the examiner may be appealed to a local appeals office, which is separate and independent of the IRS office that conducted the examination. An appeals office is the only level of appeal within the IRS. Conferences with appeals office personnel may be conducted in person, through correspondence, or by telephone with the taxpayer or its authorized representative. Only attorneys, certified public accountants or enrolled agents are allowed to represent a taxpayer before Appeals. An unenrolled preparer may be a witness at the conference, but not a representative.
Appeal to Courts
In addition to administrative remedies, an organization may use certain judicial remedies. If statutory prerequisites are met, an organization may file suit in a United States District Court or the United States Claims Court for a refund of taxes paid, or in the United States Tax Court for a re-determination of any tax deficiencies. An exempt organization may also file suit for a declaratory judgment in certain situations.
- Publication 892, How to Appeal an IRS Decision on Tax Exempt Status
- Publication 556, Examination of Returns, Appeal Rights, and Claims for Refund
- Publication 3498, The Examination Process
- Fast track settlement procedures: Procedures for expediting examination case resolution.
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