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Publication 557

Appeal Procedures(p7)

If your organization applies for tax-exempt status and EO Determination decides your organization does not qualify, your organization will be advised of its rights to protest the determination by requesting Appeals Office consideration. This process does not apply to determinations issued by EO Technical. Your organization must submit a statement of its views fully explaining its reasoning. The statement must be submitted within 30 days from the date of the adverse determination letter and must state whether it wishes Appeals Office consideration.


A principal officer or trustee can represent an organization at any level of appeal within the IRS. Also, an attorney, certified public accountant, or individual enrolled to practice before the IRS can represent the organization.
If the organization's representative attends a conference without a principal officer or trustee, the representative must file a proper power of attorney or a tax information authorization before receiving or inspecting confidential information. Form 2848 or Form 8821, Tax Information Authorization, as appropriate (or any other properly written power of attorney or authorization), can be used for this purpose. These forms can be obtained from the IRS. For more information, see Publication 947, Practice Before the IRS and Power of Attorney.

Appeals Office Consideration(p7)

EO Determinations will consider the statement protesting and appealing (hereinafter appealing) the adverse determination and decide if the information affects its determination. If the appeal does not provide a basis to reconsider its adverse determination, it will forward the appeal and case file to the Appeals Office. For more information about the role of the Appeals Office, see Publication 892, Exempt Organization Appeal Procedures for Unagreed Issues. The appeal should include the following information.
  1. The organization's name, address, daytime telephone number, and employer identification number.
  2. A statement that the organization wants to protest the determination.
  3. A copy of the letter showing the determination you disagree with, or the date and symbols on the determination letter.
  4. A statement of facts supporting the organization's position in any contested factual issue.
  5. A statement outlining the law or other authority the organization is relying on.
  6. A statement as to whether a conference at the Appeals Office is desired.
The statement of facts in item 4 must be declared true under penalties of perjury. This may be done by adding to the protest the following signed declaration:
 "Under penalties of perjury, I declare that I have examined the statement of facts presented in this protest and in any accompanying schedules and statements and, to the best of my knowledge and belief, it is true, correct, and complete."  
If the organization's representative submits the appeal, a substitute declaration must be included, stating:
  1. That the representative prepared the appeal and accompanying documents, and
  2. Whether the representative knows personally that the statements of fact contained in the appeal and accompanying documents are true and correct.
Be sure the appeal contains all of the information requested. Incomplete appeals will be returned for completion.
If a conference is requested, it will be held at the Appeals Office, unless the organization requests that the meeting be held at a field office convenient to both parties.
The Appeals Office, after considering the organization's appeal as well as information presented in any conference held, will notify the organization of its decision and issue an appropriate determination letter. An adverse decision can be appealed to the courts (discussed later).
The Appeals Office must request technical advice from EO Technical on any exempt organization issue concerning qualification for exemption or foundation status for which there is no published precedent or for which there is reason to believe that nonuniformity exists. If an organization believes that its case involves such an issue, it should ask the Appeals Office to request technical advice from EO Technical.
Any determination letter issued on the basis of technical advice from EO Technical cannot be appealed to the Appeals Office for those issues that were the subject of the technical advice from EO Technical.

EO Technical Consideration(p7)

If an application is referred to EO Technical for issuance of a ruling and an adverse ruling is issued, the organization will be informed of the basis for the conclusion, its right to file a protest within 30 days, and its right to have a conference at Headquarters.

Administrative Remedies(p7)

In the case of an application under section 501(c)(3), all of the following actions, called administrative remedies, must be completed by your organization before an unfavorable ruling or determination letter from the IRS can be appealed to the courts.
  1. The filing of a substantially completed application Form 1023 or group exemption request under section 501(c)(3) (described earlier in this chapter) or the filing of a request for a determination of foundation status (see Private Foundations and Public Charities in chapter 3).
  2. In the case of a late-filed application, requesting relief under Regulations section 301.9100 regarding applications for extensions of time for making an election or application for relief from tax (see Application for Recognition of Exemption in chapter 3).
  3. The timely submission of all additional information requested to perfect an exemption application or request for determination of private foundation status.
  4. Exhaustion of all administrative appeals available within the IRS, including protest of an adverse ruling issued by EO Technical in an exemption application.
The actions just described will not be considered completed until the IRS has had a reasonable time to act upon the appeal or protest, as the case may be.
An organization will not be considered to have exhausted its administrative remedies before the earlier of:
  1. The completion of the steps just listed and the sending by certified or registered mail of a notice of final determination, or
  2. The expiration of the 270-day period in which the IRS has not issued a notice of final determination and the organization has taken, in a timely manner, all reasonable steps to secure a ruling or determination.

270-day period.(p8)

The 270-day period will be considered by the IRS to begin on the date a substantially completed Form 1023 or group exemption request is sent to the IRS. See Application Procedures, earlier, for information needed to complete Form 1023.
If the application does not contain all of the required items, it will not be further processed and may be returned to the applicant for completion. The 270-day period, in this event, will not be considered as starting until the date the application is remailed to the IRS with the requested information, or, if a postmark is not evident, on the date the IRS receives a substantially completed application.

Appeal to Courts(p8)

If the IRS issues an unfavorable determination letter or ruling to your organization and you have exhausted all the administrative remedies just discussed, your organization can seek judicial remedies.
For example, if your organization has paid the tax resulting from the adverse determination and met all other statutory prerequisites, it can file suit for a refund in a U.S. District Court or the U.S. Court of Federal Claims. Or, if your organization elected not to pay the tax deficiency resulting from the adverse determination and met all other statutory prerequisites, it can file suit for a redetermination of the tax deficiencies in the United States Tax Court. For more information on these types of suits, get Publication 556, Examination of Returns, Appeal Rights, and Claims for Refund.
In certain situations, your organization can file suit for a declaratory judgment in the U.S. District Court for the District of Columbia, the U.S. Court of Federal Claims, or the U.S. Tax Court. This remedy is available if your organization received an adverse notice of final determination, or if the IRS failed to make a timely determination on your initial or continuing qualification or classification as an exempt organization. However, your exempt status claim must be as:

Adverse notice of final determination.(p8)

The adverse notice of final determination referred to above is a ruling or determination letter sent by certified or registered mail holding that your organization:

Favorable court rulings - IRS procedure.(p8)

If a suit results in a final determination that your organization is exempt from tax, the IRS will issue a favorable ruling or determination letter, provided your organization has filed an application for exemption and submitted a statement that the underlying facts and applicable law are the same as in the period considered by the court.