What Is IRS Publication 5?
IRS Publication 5, "Your Appeal Rights and How to Prepare a Protest If You Don't Agree" is a document published by the Internal Revenue Service outlining the procedure taxpayers are to follow if they disagree with IRS findings from an audit. The IRS Independent Office of Appeals oversees this process.
- IRS Publication 5 describes a taxpayer's rights to appeal and protest findings from an IRS audit.
- The document outlines the steps of the appeals process along with possible outcomes for taxpayers.
- If you are successful, you may also be able to recover some administrative and legal costs.
Understanding Publication 5
IRS Publication 5 outlines how a taxpayer would go about filing an appeal following an audit. Taxpayers have the right to appeal the findings from an IRS tax audit if they disagree with them or wish to contest them. They may do so by requesting a meeting, conducted either in-person or over the telephone, with the supervisor of the IRS employee who issued the findings. If the meeting does not resolve the dispute, the taxpayer can appeal the case. Appealing the case may require a written letter of protest outlining why the taxpayer doesn't agree with the IRS findings.
In most cases, taxpayers who don't reach an agreement at the appeals conference may be eligible to take their case to court. When in court, taxpayers can either represent themselves or Internal Revenue Service. If the tax appeals court discovers that the taxpayer has filed a frivolous lawsuit, it can fine the taxpayer upwards of $25,000.
The IRS Appeals Process
Before you begin the IRS appeals process, be sure to have the required documents and information collected, and provide this to the IRS employee who is handling your case. Some cases can be fast-tracked through a process known as FTS, where a neutral party will handle the dispute in a timely manner. Even if the outcome of the FTS remains unfavorable, you may continue the appeal.
To do so, you must submit a written letter of protest outlining why you disagree with the charges due unless the case is considered "small" (i.e., under $25,000). For a small case, you do not need to complete the full-length formal letter, but instead a simple form and short brief outlining the details.
According to IRS Form 5, your formal protest must always include the following:
- Your name, address, and a daytime telephone number.
- A list of all disputed issues, tax periods or years involved, proposed changes, and reasons you disagree with each issue.
- Facts supporting your position on each disputed issue.
- The relevant law, regulation, or authority, if any, supporting your position on each disputed issue.
- The penalties of perjury statement, which reads: “Under penalties of perjury, I declare to the best of my knowledge and belief, the information contained in this protest and accompanying documents is true, correct, and complete.”
If you are unable to reach a resolution through the appeals process and still refuse to pay what is due, you may be remanded to U.S. tax court and/or federal claims court.