Guides

What To Expect at Your IRS Appeals Conference

You requested IRS Appeals. Here's how to prepare for the conference, what the Appeals Officer will ask, and how to negotiate a settlement.

Liam Williams

Liam Williams

— 15 min read

You filed your protest or Form 12203. The IRS acknowledged receipt and assigned your case to the Independent Office of Appeals. Now you're waiting for a phone call from someone called an Appeals Officer—and you're wondering what's going to happen when it comes.

The Appeals conference is where most IRS disputes are resolved. It's not a courtroom. It's not adversarial. And you don't need a law degree to do well. But preparation matters. The Appeals Officer is evaluating whether the IRS could sustain its position at trial—and your job is to show them the weaknesses in that position.

This guide covers what the conference looks like, how to prepare for it, and how to negotiate effectively.

Before the Conference: What To Prepare

Preparation is the single biggest factor in how well your Appeals conference goes. The Appeals Officer will be organized. You need to be too.

Review the Examination Report

Go back to your examination report—specifically Form 886-A (Explanation of Items). For each adjustment, the examiner laid out the legal basis, the facts, and the reason for the change. The Appeals Officer uses Form 886-A as their starting point, so you need to know exactly what the IRS's position is on every disputed item.

Also review Form 4549 (Income Tax Examination Changes), which shows the numerical impact of each adjustment.

Organize by Issue

The Appeals Officer evaluates each issue independently—not your case as a whole. Organize your documents the same way. Create a separate folder (physical or digital) for each disputed item, with the relevant receipts, bank statements, contracts, and correspondence grouped together.

Gather New Evidence

You can submit documentation at Appeals that you didn't provide during the audit. If you've located additional receipts, obtained third-party records, or found bank statements that support your position, bring them.

But be aware: if you submit significant new information or raise entirely new issues, the Appeals Officer will generally return the case to the originating IRS office for analysis, per Publication 5. That delays resolution. New evidence supporting existing issues is fine. New issues are a different matter.

Pull Your Transcripts

Your account transcript and tax return transcript show what the IRS has on file for the tax year in question. Review them before the conference so you can spot discrepancies and verify the IRS's records match your own. You can request transcripts online at IRS.gov or by calling the IRS.

Understand Hazards of Litigation

This is the framework the Appeals Officer uses to evaluate your case—more on it below. For now, know that the AO is not deciding who is "right." They're evaluating what the IRS would likely win at trial. Before the conference, look at each disputed issue through that lens: how strong is the IRS's evidence? How strong is yours?

Consider Representation

You can represent yourself at the Appeals conference—most people do. But if you want help, you can appoint an attorney, CPA, or enrolled agent using Form 2848, Power of Attorney. If your representative will attend without you, Form 2848 must be properly completed and filed.

If you can't afford a representative, a Low Income Taxpayer Clinic may be able to represent you at no cost if your income is below 250% of the poverty line and the amount in dispute is $50,000 or less.

Write a Brief Summary

Consider preparing a short written summary of your position on each issue—a few paragraphs per item explaining what the IRS adjusted, why you disagree, and what evidence supports your position. This isn't required, but it helps you organize your thoughts and gives the Appeals Officer something concrete to work from.

How the Conference Works

Scheduling

After the IRS Examination office forwards your case to Appeals, an Appeals Officer (AO) is assigned. The IRS's internal target is initial contact within 45 days of case receipt, per IRM 8.7.11, but this is an internal benchmark—not a deadline the IRS is required to meet.

There is no statutory deadline for when Appeals must schedule your conference. If you haven't heard anything within 120 days of submitting your protest, contact the IRS office that referred your case.

Format

Per Publication 556 and Publication 4227, Appeals conferences are informal. They can be conducted by:

  • Telephone—the most common format for individual cases
  • Video conference
  • In person—available upon request
  • Correspondence—written exchanges only, for simpler issues

The conference is not under oath. There is no judge, no court reporter, no formal opening statements. It's a structured conversation between you and the Appeals Officer about the disputed issues on your return.

Ex Parte Rules

The Appeals Officer is independent from the IRS examiner who conducted your audit. Per IRC § 7803(e) and IRM 8.1.10, strict ex parte communication rules prohibit the examiner from privately discussing the merits of your case with the AO. The examiner cannot lobby the Appeals Officer about strengths or weaknesses, credibility assessments, or recommendations on how to resolve your case.

If the Appeals Officer needs clarification from the examiner on a substantive issue—such as when you submit significant new documentation—you will be given the opportunity to participate in that communication. The examiner's analysis is shared with you, and you can respond to it.

If an ex parte communication does occur, the IRS is required to inform you and give you an opportunity to respond. The case may be reassigned to a different Appeals Officer.

What Happens During the Conference

The Appeals Officer will not raise new issues against you or increase the amount of the proposed deficiency beyond what was in the examination report. The AO's job is to evaluate the existing adjustments—not to audit you further.

The AO introduces themselves, explains the Appeals process, and then works through the disputed issues one by one. For each issue, the AO will:

  • Explain the IRS's position (as reflected in the examination report)
  • Ask about your position and your evidence
  • Evaluate the strengths and weaknesses of both sides
  • Discuss potential settlement

You're entitled to understand the IRS's reasoning on each adjustment. If something in the examination report is unclear, ask the AO to explain it.

Multiple Sessions

Complex cases—those involving several issues or significant documentation—may require more than one conference. The AO may also schedule follow-up sessions if you need time to gather additional evidence or consider a settlement proposal.

Recording

You have the right to audio-record any in-person interview under IRC § 7521(a). Per Publication 556, you must give 10 days' advance written notice and bring your own recording equipment. The IRS can also record—it must provide you the same advance notice. This is the same rule that applies during the examination.

Your Right To Pause

Under IRC § 7521(b)(2), you can suspend an in-person interview at any time to consult with a representative—an attorney, CPA, or enrolled agent. If you feel overwhelmed or unsure how to respond during the conference, you can ask to pause and get advice before continuing.

What the Appeals Officer Is Evaluating

Hazards of Litigation

This is the single most important concept for your Appeals conference. The Appeals Officer does not decide who is morally right. They evaluate what the IRS would likely achieve if your case went to trial—a standard called "hazards of litigation."

Per IRM 8.6.4, settlement evaluations reflect the "probable result in the event of litigation" or "mutual concessions based on the relative strength of the opposing positions where there is substantial uncertainty."

The AO must take a "judicial attitude"—an objective appraisal of the facts, law, and prospects without seeking maximum results for the government.

What This Means in Practice

The AO evaluates each issue independently. Here's what they're weighing:

  • Strength of the IRS's evidence. Does the IRS have the documentation to prove its position at trial? If the examiner's adjustments are based on assumptions rather than records, that's a litigation hazard for the IRS.
  • Strength of your evidence. Can you substantiate the items in dispute? Receipts, bank statements, contracts, and third-party records are far more persuasive than testimony alone.
  • The applicable law. Is the legal standard clear, or is there room for interpretation? If the law is unsettled or the facts fall in a gray area, that creates uncertainty—and uncertainty creates room for settlement.
  • Credibility. Would you be a credible witness if this case went to trial? Being organized, factual, and consistent strengthens your position. Changing your story between the audit and the conference weakens it.

Concrete Examples

Strong position for you: The IRS disallowed a business expense deduction, but you have receipts, bank statements, and an invoice from the vendor showing the amount, date, and business purpose. The examiner's Form 886-A says "taxpayer did not provide substantiation"—but you have it now. The AO recognizes the IRS would likely lose this issue at trial.

Weak position for you: You claimed a business travel deduction but have no contemporaneous records of the trips—no receipts, no mileage log, no itinerary. Your only evidence is your testimony. Under the strict substantiation rules of IRC § 274(d), testimony alone is insufficient for travel, meals, and listed property. The AO has little room to concede.

Mixed position: The IRS disallowed a charitable contribution deduction. You have a bank statement showing the payment, but the charity's written acknowledgment doesn't meet the requirements of IRC § 170. The AO might concede part of the deduction where your evidence is strong and sustain it where the documentation falls short.

Burden of Proof

In Tax Court, the burden of proof is generally on the taxpayer—the IRS's determination is presumed correct. However, under IRC § 7491(a), the burden can shift to the IRS on factual issues if you meet all of the following conditions:

  1. You introduced credible evidence relating to the factual issue
  2. You complied with all substantiation requirements under the tax code
  3. You maintained all required records and cooperated with reasonable IRS requests for information, documents, and meetings

While this burden shift technically applies only "in any court proceeding," the Appeals Officer factors it into the hazards analysis because they're evaluating what would happen at trial. If you've met the conditions, mention it.

Penalties Are Evaluated Separately

Per IRM 8.6.4, penalties are "settled based on the merits and hazards surrounding each penalty issue standing alone." This is significant—penalties can be conceded even if the underlying tax adjustment is sustained.

Under IRC § 7491(c), the IRS has the burden of production for penalties in court proceedings. The IRS must produce evidence that the penalty was properly determined—including, under IRC § 6751(b), that the penalty received written supervisory approval before being assessed. If the IRS can't meet this burden, the penalty fails regardless of the underlying tax issue.

This gives you leverage on penalty issues that is separate from the merits of the tax adjustments themselves. For more on penalty arguments, see How To Request IRS Penalty Abatement.

Negotiating at Appeals

The Appeals conference is a negotiation, not a hearing. Here's how to approach it effectively.

Lead With Your Strongest Issue

Start with the issue where your evidence is most compelling and the IRS's position is weakest. An early concession from the AO on one issue builds momentum and establishes credibility for your remaining arguments.

Concede Weak Points Strategically

If your evidence on one issue is genuinely weak, conceding it—rather than fighting everything—signals to the AO that you're being realistic. That credibility helps when you push back hard on issues where your position is strong. You don't have to agree on everything or nothing. Partial agreements are common and often produce the best overall result.

Ask Questions

Ask the AO to explain the IRS's position on each issue. You're entitled to understand why the IRS made each adjustment. Listen carefully—the AO may reveal weaknesses in the IRS's case that you can address directly.

Don't Be Emotional or Combative

This is understandably stressful. But the Appeals conference is an analytical exercise, not a moral judgment. The AO is evaluating hazards of litigation—what a judge would decide based on evidence and law. Arguments framed as "this isn't fair" are less effective than arguments framed as "the IRS can't prove this at trial because..." Stay factual, organized, and calm.

Take Notes

Write down the AO's position on each issue, any concessions offered, and any requests for additional information. If the conference spans multiple sessions, your notes will keep you organized and help you track what was discussed.

Ask for Time

You don't have to accept or reject a settlement offer on the spot. Per Publication 4227, Appeals will allow you reasonable time to respond to requests for information. You can ask for time to consider a settlement proposal, consult with someone, or gather additional documentation. Take the time you need to evaluate the offer carefully.

If You Reach an Agreement

Form 870-AD

If you and the Appeals Officer settle your case, you sign Form 870-AD—the standard Appeals settlement form for mutual-concession settlements.

What you give up by signing:

  • You waive the restrictions on assessment and collection—the IRS can assess the agreed deficiency immediately upon acceptance
  • You agree not to file or pursue a refund claim for the agreed tax years and issues

What the IRS pledges:

  • The IRS pledges not to reopen the case for the agreed years and issues—except for fraud, malfeasance, concealment, misrepresentation of a material fact, or an important mathematical error

When it takes effect: Form 870-AD becomes effective upon acceptance by or on behalf of the Commissioner—not when you sign it. This is different from Form 870 (the examination-level agreement), which becomes effective upon receipt by the IRS.

This distinction matters for interest. Interest under IRC § 6601 accrues from the original due date of the return until the tax is paid. The date the form takes effect can influence when certain interest calculations stop running.

How Form 870-AD Differs From Form 870

At the examination level, the IRS uses Form 870. If you signed Form 870 during the audit, you may remember that it waives the restrictions on assessment but does not include a no-reopening pledge—and you can still file a refund claim later. Form 870-AD provides greater finality: the IRS commits not to reopen, but you waive refund claims on the settled issues.

Partial Agreements

You don't have to agree on everything. If you settle some issues but not others, the settled issues are resolved through Form 870-AD and the remaining disputes continue through the process. The IRS issues a Notice of Deficiency for the unresolved items, and you can petition Tax Court on those issues.

Interest

Settlement does not eliminate interest. Interest accrues on any underpayment from the original due date of the return until you pay, regardless of how long the Appeals process takes. Settling sooner reduces the total interest that accumulates.

If You Don't Reach an Agreement

Notice of Deficiency

If Appeals upholds the examination findings—in whole or in part—the case returns to the IRS, which issues a Notice of Deficiency (the 90-day letter). From the date on that notice, you have 90 days to file a petition with the U.S. Tax Court (150 days if the notice is addressed outside the United States). That deadline is set by IRC § 6213(a) and cannot be extended by the IRS or the Court.

The filing fee is $60, with fee waivers available for qualifying taxpayers.

You Haven't Lost Anything

Going through Appeals and not reaching an agreement does not weaken your position. You retain the same right to petition Tax Court that you would have had without going through Appeals. The Appeals conference gives you a preview of how the IRS views its case—which is valuable information for deciding whether to file a petition.

Post-Appeals Mediation

If you and the AO can't reach agreement on all issues but both sides are willing to continue negotiating, Post-Appeals Mediation (PAM) may be available. PAM uses a trained IRS mediator to facilitate discussions between you and the Appeals Officer. It's voluntary—both sides must agree to participate—and it doesn't change your right to receive a Notice of Deficiency if mediation fails.

Docketed Settlement: A Second Chance To Negotiate

Filing a Tax Court petition creates what's called a "docketed case"—and that often produces more productive settlement discussions. Per Publication 5, if you petition the Tax Court and didn't previously go through Appeals, you'll normally get a chance to attempt settlement with Appeals while waiting for trial.

Even if you already went through pre-petition Appeals, the hazards of litigation become more concrete once a petition is filed and a trial date is approaching.

Most (76%) of Tax Court cases close by formal settlement. For a detailed guide to the docketed settlement process, see How To Settle Your Tax Court Case. If Appeals denied your case outright, see What Happens After IRS Appeals Denies Your Case.

How Long Appeals Takes

Realistic Timeline

There is no published data on average resolution times for Appeals cases, and timelines vary widely depending on case complexity, the Appeals Officer's caseload, and how quickly both sides exchange information. Simple cases with a single issue may resolve in a few months. Complex cases with multiple issues and new evidence can take considerably longer.

What To Do While You Wait

While your case is at Appeals, the IRS generally will not assess or collect the disputed tax. No Notice of Deficiency has been issued yet, so the IRS cannot assess the deficiency, and IRC § 6213 prohibits collection of any amount that requires a Notice of Deficiency until that notice is sent and the petition period expires.

Continue to file all required tax returns and pay any taxes due for other years. Your dispute is over a specific examination—it doesn't pause your other tax obligations.

If You Haven't Heard Anything

If 120 days pass after submitting your protest and you haven't received any contact from an Appeals Officer, follow up with the IRS office that referred your case. Cases can get lost in the system, and a follow-up call can get things moving.

Statute of Limitations: Form 872 and Form 872-A

Before accepting a case, the IRS generally requires more than 365 days remaining on the assessment statute of limitations. Per Publication 5, if additional time is needed, the IRS will ask you to sign a consent to extend:

  • Form 872 extends the assessment deadline to a specific date
  • Form 872-A is an open-ended extension that remains in effect until either party terminates it by filing Form 872-T

If you refuse to extend the statute, the IRS may decline to refer your case to Appeals and instead issue a Notice of Deficiency to protect its assessment deadline. Signing an extension is generally a practical necessity if you want the Appeals process to proceed.

Common Mistakes

Not preparing. Showing up without organized documentation—or without understanding the specific adjustments the IRS made—puts you at a disadvantage. The AO is prepared. You need to be too.

Raising new issues. If you submit significant new information or raise issues that weren't part of the original examination, the AO will generally return the case to Examination for analysis. That delays everything. Stick to the issues in the examination report and bring evidence that supports your position on those issues.

Treating it as adversarial. The Appeals conference is a negotiation, not a trial. The AO is evaluating hazards of litigation—not trying to defeat you. Approaching the conference as a collaborative problem-solving exercise produces better results than treating it as a fight.

Not understanding hazards of litigation. The AO is not evaluating "fairness" or deciding who deserves to win. They're evaluating what a judge would likely decide based on evidence and law. Frame your arguments accordingly.

Refusing to concede weak issues. If your evidence on one issue is genuinely weak, fighting it anyway signals that you're not being realistic—and that undermines your credibility on the issues where your evidence is strong.

Accepting the first offer without evaluating it. The initial settlement proposal is a starting point, not a final position. Ask the AO to explain the reasoning behind the offer for each issue, and negotiate from there.

Signing Form 870-AD without reading it carefully. Form 870-AD waives the restrictions on assessment and bars refund claims on the settled issues. Read every line before signing. Make sure the amounts match what you agreed to.

Not responding to the Appeals Officer. If you stop communicating or miss scheduled conferences without explanation, the AO will close your case and return it to the originating IRS office. The result is a Notice of Deficiency based on the full examination amount—the same outcome as if you never requested Appeals.

Making constitutional or moral arguments. Appeals evaluates cases based on the tax code and case law. Arguments based on moral, religious, political, or constitutional objections to the tax system are not considered and will undermine your credibility on substantive issues.

Not knowing you can request a supervisor. If you believe the Appeals Officer is not following proper procedures or is refusing to consider your evidence, you can request a conference with the AO's manager. This is a procedural right—not a guarantee of a different outcome, but a check on the process.

Resources

IRS Publications and Forms

IRC Sections

IRM Sections

This article is for informational purposes only and does not constitute legal or tax advice. For advice specific to your situation, consult a qualified tax professional or attorney.

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