[Date]
Internal Revenue Service
[Name of examiner or group shown on the 30-day letter]
[Address shown on the 30-day letter]
Re: Formal written protest and request for Appeals conference
Taxpayer: [Client name]
Address: [Client address]
Daytime telephone: [Client daytime phone]
Taxpayer identification number: [SSN or EIN]
Letter: [Letter number, e.g. Letter 525 / 950] dated [Date of 30-day letter]
Person to contact on the letter: [Examiner name and ID number]
Tax form and period(s): [Form and periods]
The taxpayer wants to appeal the changes proposed by the IRS in the letter identified above and requests a conference with the IRS Independent Office of Appeals. A copy of the letter and the examination report is enclosed.
Disputed issues, periods and proposed changes
- Issue 1: [Short title, e.g. Disallowance of Schedule C travel expenses]. Period: [Year]. Proposed change: [Amount of adjustment and resulting tax].
- Issue 2: [Short title, e.g. IRC 6662(a) accuracy-related penalty]. Period: [Year]. Proposed change: [Amount].
Issue 1: [Short title]
Reason for disagreement. [State in one or two sentences why the taxpayer disagrees]
Facts. [Facts supporting the taxpayer's position, with exhibit references, e.g. Exhibit A, mileage log; Exhibit B, client invoices]
Law. [Code sections, regulations, rulings and cases supporting the position, with a short explanation of how each applies]
Issue 2: [Short title]
Reason for disagreement. [Reason]
Facts. [Facts]
Law. [Authority, e.g. IRC 6664(c) reasonable cause; IRC 6751(b) written supervisory approval]
Declaration
Use one of the following, as applicable, and delete the others.
Taxpayer: 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.
Representative with personal knowledge: Under penalties of perjury, I declare that I submitted the protest and accompanying documents, and to the best of my personal knowledge and belief, the information stated in the protest and accompanying documents is true, correct, and complete.
Representative without personal knowledge: Under penalties of perjury, I declare that I submitted the protest and accompanying documents, and I have no personal knowledge concerning the information stated in the protest and accompanying documents.
[Signature] [Date]
[Name, title or credential; CAF number if representative]
Enclosures: Copy of 30-day letter and examination report; Form 2848; Exhibits [A through X]
When a formal protest is required
Publication 5 (Rev. 4-2021) requires a formal written protest when the proposed change in tax and penalties for any tax period is more than $25,000, and for partnership, S corporation, employee plan and exempt organization cases regardless of amount. If any one period exceeds $25,000, a formal protest is needed for all periods. At or below that amount, a small case request or Form 12203 is enough. IRM 4.10.8.12.9.3 uses the same $25,000 line and counts the proposed increase or decrease in tax, including penalties, or the claimed refund.
The protest answers a 30-day letter. Publication 556 explains that the letter notifies the taxpayer of the right to appeal “within 30 days,” and comes with the examination report, an agreement form and a copy of Publication 5. If the client does not respond, the next step is a notice of deficiency.
The Publication 5 elements
| Publication 5 requires | Where it is in the template |
|---|---|
| Statement that you want to appeal the proposed changes | Opening paragraph |
| Name, address and daytime telephone number | Reference block |
| List of all disputed issues, tax periods, proposed changes and reasons for disagreement | Disputed issues list, then each issue |
| Facts supporting your position on each disputed issue | Facts paragraph under each issue |
| Law or authority, if any, supporting your position on each issue | Law paragraph under each issue |
| Penalties of perjury statement (taxpayer or representative version) | Declaration |
| Signature under the penalties of perjury statement | Signature line |
Publication 5 gives representatives two declarations depending on whether they have personal knowledge of the facts; IRM 4.10.8.12.9.3(3)(j) says the representative’s substitute declaration states that the representative prepared the protest and whether the representative knows personally that the facts are true and correct. The template includes all three versions so you can delete the two that do not apply.
How Examination judges adequacy
The protest goes to Compliance, which forwards the case to Appeals (IRM 8.2.1.2). Before that, the group reviews it within seven days of receipt under IRM 4.10.8.12.9.3. The IRM is clear about what the review is for: “Adequacy of a protest is generally not determined based on its substantive content, such as whether the protest contains sufficient factual or legal support.” It is a completeness check. The IRM’s own example of an inadequate protest is one that cites IRC 162 “but does not provide reasons for their disagreement and any factual information to support their position.”
If the protest is incomplete, “The protest should be returned to the taxpayer and additional time should be granted to perfect the protest,” using Letter 1025, 1025-A or 1025-B. Two items do not trigger a return: a joint return protest signed by only one spouse, and a missing copy of the 30-day letter, since “the case can be closed using the copy in the file.” Appeals has its own check: IRM 8.2.1.5 lists as grounds for returning a case a “Missing protest, or the protest, when required, fails to set forth the taxpayer’s position, lacks detail, or fails to meet the requirements of Publication 5.”
Drafting each section
One heading per issue. Examination may write a rebuttal on Form 886-A addressing new arguments and factual differences, and a copy goes to the taxpayer with Letter 5072. A protest organized issue by issue, matching the examiner’s report, makes the rebuttal and the Appeals conference easier to follow.
Facts with exhibits. Put every fact you will rely on in the protest. Publication 5 warns that if you raise new information or a new issue at Appeals, “Appeals will generally return the case to the originating IRS office for its determination on the new information.” IRM 8.2.1.5 lists new information and new issues among the grounds for returning a case.
Law. Appeals settles on the merits and on hazards of litigation, but Publication 5 says it “cannot consider your arguments if they are based only on moral, religious, political, constitutional, conscientious, or similar objections” to tax.
Penalties as a separate issue. List any proposed penalty as its own issue, with reasonable cause facts and any IRC 6751(b) supervisory approval argument.
Where to send it and what happens next
- Send the protest to the address in the 30-day letter. Publication 5 says: “Send your protest to the IRS address in the letter”. It goes to Examination, not directly to Appeals.
- Enclose the 30-day letter and report, a Form 2848 that covers the periods and matters, and the exhibits.
- Check the statute. IRM 8.2.1.4 has Appeals “Ensure there are at least 365 days (270 days in estate tax cases or IRC 6206 cases) remaining on the Assessment Statute Expiration Date (ASED) when the case was received by Appeals.” Expect a request for Form 872 if the statute is short.
- If the protest is complete and no rebuttal is needed, the group sends Letter 2280 telling the taxpayer the case is being transferred to Appeals.
- Prepare for the Appeals conference. Appeals’ first contact usually comes by Letter 5157 or phone.
Mistakes
- Filing a small case request when a period exceeds $25,000, or for a partnership or S corporation.
- Using the taxpayer declaration when the representative signs.
- Saving key documents for Appeals instead of attaching them, which invites a return to Examination.
- Missing the 30-day date without asking the examiner for more time. IRM 4.10.8.12.8 says extensions “may be granted under reasonable circumstances,” including when the taxpayer retains a representative who needs more time to prepare a meaningful protest.
Questions practitioners ask
Does the protest have to be on a form?
No. Publication 5 describes a written statement with the listed elements. Form 12203 is for small case requests.
Who signs, the taxpayer or the representative?
Either. The representative uses one of the two representative declarations in Publication 5 depending on personal knowledge.
Can I add issues at the Appeals conference?
New issues and new information generally send the case back to Examination for comment first. Raise everything in the protest.
What if only one spouse signs on a joint return?
IRM 4.10.8.12.9.3 says one spouse’s signature does not make the protest incomplete, and the case normally goes to Appeals if the statute allows for both spouses.
Is there a separate protest for a penalty abatement denial?
Publication 5 says its protest instructions also apply to denials of certain penalty abatement requests. See appealing a penalty abatement denial.