What is the Purpose of IRS Letter 965?
IRS Letter 965, officially titled “Conference Scheduled — Non-Docketed Case,” notifies a taxpayer that their case has been referred to the Office of Appeals for independent review.
This letter pertains to matters that are non-docketed, meaning they have not yet been filed before the United States Tax Court and remain within the administrative jurisdiction of the IRS.
According to the Taxpayer Advocate Service, the purpose of Letter 965 is to inform the taxpayer that a conference has been scheduled to discuss disputed issues, such as proposed adjustments, disallowed credits, or other examination results (TAS, Notice 965).
The letter grants the taxpayer a procedural opportunity to present arguments, documents, and legal authority in support of their position before the IRS issues a final determination.
When is Letter 965 Issued?
Letter 965 is issued when a case has progressed beyond initial examination but remains unresolved. Common circumstances include:
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- The taxpayer disagrees with proposed adjustments following an audit or review.
- The taxpayer has formally requested an appeals conference.
- The IRS initiates review by the Office of Appeals to ensure procedural fairness prior to litigation.
The issuance of Letter 965 therefore marks the transition from examination to appeal, signaling that the matter is under consideration by an independent branch of the IRS.
Effects and Legal Consequences
Receipt of Letter 965 indicates that the taxpayer retains the right to administrative resolution of the dispute, but the matter has reached a decisive procedural phase.
During the appeals process, the taxpayer or their authorized representative may:
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- Present factual and legal arguments contesting the IRS’s proposed findings.
- Submit evidentiary documentation supporting positions taken on the return.
- Negotiate potential settlements within the boundaries of the tax law.
Failure to respond or participate in the scheduled conference may result in waiver of the right to appeal administratively, and the IRS’s determination may become final. In such cases, the taxpayer could also incur additional interest and penalties associated with the unresolved liability.
Procedure
The process established by Letter 965 follows a defined administrative sequence:
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- Notification and Confirmation: The taxpayer acknowledges receipt and confirms attendance at the scheduled conference (in person, telephonically, or virtually).
- Compilation of the Case File: All relevant returns, correspondence, examination reports, and supporting documents are organized.
- Legal and Technical Review: Applicable statutes, regulations, and prior IRS determinations are analyzed to assess the strength of the taxpayer’s position.
- Conference Before the Appeals Officer: The taxpayer presents the case formally, ensuring all factual assertions are substantiated and legal arguments are properly cited.
- Administrative Resolution: The Appeals Officer issues a written decision that may affirm, adjust, or overturn the prior determination.
This procedure is inherently documentary and evidentiary in nature. The merits of the taxpayer’s position depend primarily on the quality of the evidence and the precision of the legal reasoning presented during the conference.
Relevance to Taxpayers
From a legal standpoint, Letter 965 functions as a procedural safeguard that ensures taxpayers receive due process prior to litigation. It provides a structured venue to resolve disputes without the financial and procedural burden of court proceedings.
When effectively managed, the appeals process can lead to:
- Correction of erroneous assessments.
- Reduction or elimination of penalties.
- Closure of disputes without judicial intervention.
We Can Help!
Letter 965 represents a pivotal point in federal tax controversy, where administrative law, procedural due process, and evidentiary advocacy converge. The quality of representation and documentation presented at this stage often determines the ultimate resolution of the taxpayer’s case.
If you’ve received IRS Letter 965, contact our office for a confidential consultation today!
