EP Examination Process Guide - Section 7 - Appeals - Appeals Procedures - Appeals Process
This section provides a brief description of the Appeals Office, how to file a written protest, representation during the appeals process, and what happens beyond the appeals process.
A. Brief Description of the Appeals Office
The Appeals Office is separate and independent of your local IRS office, service or compliance center. The Appeals Office is the only level of appeal within the IRS. Appeal conferences are generally held in an informal manner by correspondence, by telephone, or at a personal conference. If you want an appeals conference, follow the instructions in the letter you received which explains that a formal written protest or a brief statement of disputed issues must be filed with your local office. Your request will be sent to the Appeals Office to arrange a conference at a convenient time and place. You or your representative should be prepared to discuss all disputed issues at the conference. Appeal conferences are not available to taxpayers whose reasons for disagreement are not within the scope of the internal revenue laws. For example, a disagreement based solely on moral, religious, political, constitutional, conscientious, or similar grounds is not eligible for an appellate conference.
B. How to File a Written Protest
When you request an appellate conference in an EP case, you must file a written protest or brief statement of disputed issues. The protest should be sent within the limit specified in the letter you received with the examination report and contain the following:
Your name and address,
A statement that you want to appeal the examination findings to the Appeals Office,
The date and symbols from the letter showing the proposed changes and findings you disagree with,
The tax periods or years involved,
An itemized schedule of the changes with which you disagree,
A statement of facts supporting your position on any issue which you disagree, and
A statement stating the law or other authority on which you rely.
You must declare that the statement of facts under (6) is true under penalties of perjury. Do this by adding the following signed declaration: “Under the penalties of perjury, I declare that I have examined the statement of facts presented in this protest and in any accompanying schedules and, to the best of my knowledge and belief, they are true, correct, and complete.” If your representative submits the protest for you, he or she may substitute a declaration stating:
That he or she prepared the protest and accompanying documents, and
Whether he or she knows personally that the statement of facts in the protest and accompanying documents are true and correct.
C. Representation During the Appeals Process
You may represent yourself at your appeals conference, or you may be represented by an attorney, certified public accountant, enrolled actuary or enrolled agent. Your representative must be qualified to practice before the IRS. Your representative must file a power of attorney before receiving or inspecting confidential information. Form 2848, Power of Attorney and Declaration of Representative, or any other properly written power of attorney or authorization may be used for this purpose.
D. Beyond the Appeals Process
When the Service determines the plan is not qualified, they will issue a proposed revocation letter, or proposed nonqualification letter if appropriate. A taxpayer who wants to appeal the qualification issue and the related income tax adjustments should do so by following these instructions. A taxpayer must first exhaust this administrative remedy within the IRS before petitioning the Court for a declaratory judgment. Where the declaratory judgment is based on an examination, as opposed to an application submitted by a taxpayer, the taxpayer will be "deemed" to have exhausted its administrative remedies once the IRS has issued its final letter even if the taxpayer did not pursue this available administrative appeals procedure. If the taxpayer does not appeal, the IRS will assess the related income taxes on the trust, the employer, and plan participants and beneficiaries. No assessment will be made for any related taxes on the trust, the employer, participants and beneficiaries when the case is forwarded to Appeals or Court provided there is sufficient time to hear or try the case prior to the statute of limitations expiring.
E. Court Declaratory Judgment Cases
If after the examination of your plan, you receive a final revocation letter, or a final nonqualification letter, you may petition the Court for a declaratory judgment under IRC section 7476 on the qualified status of the plan. The Court is independent of the IRS. The petition must be filed on or before the 91st day after the date of mailing of the final revocation or final nonqualification letters. Those who may petition the Court for declaratory judgment are an employer, a plan administrator, an employee who qualifies as an interested party, or the Pension Benefit Guaranty Corporation.
F. Court Deficiency Cases
If your case involves a disagreement over whether you owe additional income taxes as a result of a discrepancy adjustment because your plan is not qualified, unrelated business income tax from the EP trust, additional income taxes or Chapter 43 excise taxes, you may go to the Court after the IRS has issued a formal letter, called a Statutory Notice of Deficiency. You have 90 days from the date this notice is mailed to you to file a petition with the Court (or 150 days if addressed to you outside the United States). If you do not file the petition within the 90-day period (or 150 days as the case may be), the law requires that the IRS assess and bill you for the deficiency.
If you discuss your case with the IRS during the 90-day period (150-day period), the discussion will not extend the period in which you may file a petition with the Court.
The Court will schedule your case for trial at a location convenient to you. You may represent yourself before the Court, or you may be represented by anyone permitted to practice before that Court.
If you dispute not more than $10,000 for any one tax year, there are simplified procedures. In the case of Chapter 43 tax the $10,000 maximum applies to the total tax and penalties for each taxable period. You can get information about these procedures and other matters relating to the Court by writing the Clerk of the Tax Court, 400 Second St. N.W., Washington, DC 20217.
G. District Court and Claims Court Refund Suits
Instead of going to Court, you may take your income tax or excise tax case to the United States District Court or to the United States Claims Court. The District Court and the Claims Court hear tax cases only after you have fully paid the tax and have filed a timely claim for refund. You can get information about procedures for filing suit in either court by contacting the Clerk of your District Court, or the Clerk of the Claims Court. Claims for refund must be filed with the IRS within 2 years of payment of the tax or 3 years of the filing of return and/or submitting the payment, whichever occurs later. If the IRS does not act on your claim within 6 months from the date you filed it, you can then file suit for refund. If the IRS disallows your claim, a suit for refund must be filed in the U.S. District Court or Claims Court, no later than 2 years from the date of the disallowance. (However, if you are a nonresident alien taxpayer, you cannot take your case to a United States District Court.)
Further information on the appeals process is available in IRS Publication 1-EP, Understanding the Employee Plans Examination Process, Publication 5, Your Appeal Rights and How To Prepare a Protest If You Don't Agree, Publication 556, Examination of Returns, Appeal Rights, and Claims for Refund, and Publication 1020, Appeal Procedures, Employee Plans Examinations.