Please refer to Publication 5, Your Appeal Rights and How to Prepare a Protest If You Don’t Agree, or Publication 5 (SP), Sus Derechos de Apelación y Cómo Preparar una Protesta Si Usted No Está de Acuerdo, for details on your appeal rights and preparing a protest. The process in Publication 5 for appeals, District Court and the Federal Court of Claims procedures apply to preparer penalties. But, you can’t bring a preparer penalty suit to Tax Court.
If you disagree with the proposed penalties in the Letter 1125 and Form 5816, Report of Tax Return Preparer Penalty Case, you may request a meeting or a telephone conference with the supervisor of the person who signed the letter. Call or write to the person who signed the letter. If we still can’t come to an agreement, you have the right to request a conference with our Appeals Office.
You may request an appeals conference by the deadline on your letter as follows:
We urge you to provide as much information as you can to help speed up your appeal, saving you both time and money.
When a formal protest is required, your protest must include the following:
Send your protest in the return envelope included with your Letter 1125 by the deadline found in the letter.
You can pay the penalties and file the Form 6118, Claim for Refund of Tax Return Preparer and Promoter Penalties, with the IRS office that sent you the billing statement. Generally, if you were assessed a penalty under section 6695, you must file the claim within 3 years from the date you paid the penalty in full. See the Form 6118 and for more information and the instructions.
You can also use the Form 843, Claim for Refund and Request for Abatement. But, if you use the Request for Abatement and don’t pay the penalties, you can’t go to the United States District Court or United States Court of Federal Claims. See the Form 843 and the Instructions for the Form 843 for more information.
If you and the Appeals Office don’t agree on some or all of the penalties, you may file a refund suit with the United States District Court or United States Court of Federal Claims. But first, you must satisfy certain procedural and jurisdictional requirements including paying the penalties and filing a formal claim.
If you wish to file a refund suit, you must file it no later than 2 years from the date of our notice of claim disallowance.
If you pay the penalties and file the claim with the IRS and we haven’t responded to you on your claim within 6 months from the date you filed it, you may file suit for a refund immediately in your District Court or the Court of Federal Claims.