A Matter of Balance: IRS Appeals Processes, Staffing Create Growing Concerns for Practitioners, Taxpayers
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When a tax dispute arises between a business and the IRS, the Independent Office of Appeals is supposed to be the place where fairness prevails. Right now, that office is under serious strain – and small business owners across Georgia need to understand what that means for their cases.
At Virtue Advisors, we are closely monitoring these developments and advising clients to act before their disputes get lost in a system that is stretched beyond capacity.
What Is the IRS Independent Office of Appeals?
The IRS Office of Appeals gives taxpayers a formal second chance when they disagree with an IRS audit result. It sits apart from the compliance teams that conduct examinations.
By law, Appeals are not on the IRS’s side – and it is not on yours. It is designed to look at the facts objectively and deliver a fair outcome based on the record before it. That independence is the cornerstone of taxpayer rights in this country.
Why Is the Appeals Office Struggling Right Now?
The IRS experienced significant workforce reductions in 2025. Appeals were among the hardest-hit divisions – losing 29% of its total staff in a single year.
That loss of experienced personnel has created a growing backlog of cases. Tens of thousands of taxpayers are currently waiting for reviews that the office does not have enough staff to process in a timely way.
How Are ERC Cases Making This Worse?
Thousands of small businesses had their Employee Retention Credit claims rejected – many without a thorough review of the underlying facts. Those businesses have turned to Appeals for reconsideration.
That surge of ERC cases has added enormous pressure to an already overwhelmed office. Many of these cases are sitting in queue with no clear timeline, while the businesses behind them wait for answers they urgently need.
Is the Independence of Appeals Still Intact?
This is where the concern becomes most serious. Appeals Officers are now being asked to perform foundational case review work that should have been completed by IRS Revenue Agents during the examination stage.
That is a significant departure from long-established practice. A framework called the Appeals Judicial Approach and Culture Project – put in place specifically in 2013 to protect the independence of the Appeals process – is being bypassed in tens of thousands of cases. When Appeals Officers step into compliance roles, the independent review that taxpayers are entitled to is compromised.
What Does This Mean for a Business with an Open Dispute?
It means your case is entering a system under extraordinary stress. Wait times are longer. Case handling is less consistent. And the fair, independent review that the law promises you may not function the way it was designed to.
For businesses with ERC-related disputes, the stakes are even higher. These cases are arriving faster than the office can manage them. Submissions that lack strong documentation and clear substantiation are unlikely to move forward effectively.
Are There Any Signs of Improvement?
IRS leadership has acknowledged the backlog and has begun hiring additional Appeals Officers. That signals awareness of the problem – and that is a meaningful first step.
But new hires take time to train, and cases keep arriving. The environment today remains difficult, and the businesses best positioned to succeed are those that enter the process fully prepared – with complete records, accurate documentation, and experienced professional support.
What Should You Do Before Your Case Goes to Appeals?
Preparation is everything in this environment. A well-documented case gives an Appeals Officer exactly what they need to decide in your favor. A poorly prepared file gives them nothing to work with – and in a backlogged system, that is a serious disadvantage.
If you have received an IRS notice, have a disputed examination result, or have an unresolved ERC claim; this is the time to act – not after your case is already in the queue.
How Virtue Advisors Helps Georgia Business Owners Protect Their Rights
Virtue Advisors works with small and midsized business owners across Atlanta and Georgia to prepare IRS dispute responses, review ERC claim documentation, and build the strongest possible file before a case ever reaches the Appeals stage.
You have a legal right to a fair and independent review. Let us help you protect it.
Schedule a consultation with Virtue Advisors today. Call (678) 952-9001, email info@virtuecpas.com, or visit our website.
Disclaimer: This press release is for informational purposes only and does not constitute legal or tax advice. Consult a licensed CPA or tax professional regarding your specific IRS dispute or tax matter.
