NEW YORK (CNNMoney.com) - More and more people are battling with the IRS. Last year audits were up by 20 percent.

So if you've received the dreaded letter, today's 5 Tips is going to tell you how you can get into the ring with the tax man...and win.

Before you decide to fight back against Uncle Sam, make sure that your gains will be worth it. Taking up a battle against the IRS is no small task.

Make sure that you have all the records you'll need, decide how confident you are that you'll win, and look at how much money is at stake versus how much it will cost you to hire a tax expert. Keep in mind that you could spend hundreds, if not thousands of dollars fighting the IRS.

They know it, too -- according to Linda Martin, a former IRS Commissioner and director at Deloitte Tax LLP, the IRS generally won't bother to audit a return unless it's about $500.

If you get a notice from the IRS that you owe money to the government, make sure you file an appeal within 30 days. If you wait any longer, the government could lay claim to your property as payment of your debt.

The appeals division is a separate IRS unit that evaluates IRS decisions. When you do file an appeal you should request a hearing. You can either represent yourself or you can have your attorney or certified public attorney represent you. Keep in mind that it's very hard to get through to the offices on Mondays, says Martin.

If you feel the size of your return was wrong, or you have a small tax dispute, you may want to check out the IRS Taxpayers Advocate Office. This is an independent unit of the IRS that may help taxpayers understand and voice their rights. There should be at least one taxpayer-advocate office in your state. Check out irs.gov/Advocate or call 877-777-4778 for information.

But keep in mind, this advocacy group only welds so much power. Ultimately, they must abide by the tax law rules. The IRS Taxpayers Advocate Office cannot make decisions.

So, if you have a high profile tax case, think about getting your own hired guns. If you are a low-income taxpayer, (for example, a family of four with income less than $49,000) there are clinics that will assist and represent you in audits and IRS disputes. To see if you qualify, check out publication 4134 at www.irs.gov.

If you aren't able to pay the debts you owe, you still may have some wiggle room with the IRS. Pay what you can incrementally. If you owe less than $10,000, getting onto an installment plan is generally automatic for the IRS. For more information, go to form 9465 on www.irs.gov.

But keep in mind, with an installment plan, you'll still be charged interest for the duration of the installment plan.

If you have no way of ever paying back the debt, you can ask the agency to compromise on the amount you pay. You have to be in pretty bad financial shape in order to qualify for the compromise. Last year the acceptance rate for these compromises was 20 percent, according to Eric Smith of the IRS. If you attach it to the return, they can look at the payment proposal right away.

If you feel your tax bill is unfair, then head to U.S. Tax Court where you won't have to pay the contested tax. This court specializes in tax issues. And for some folks, that could be a drawback.. They may have better chances if they go to a district court that hears a variety of cases, not just tax issues, say Martin. But be wary, other courts may make you pay the contested bill before your case is even heard.

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Gerri Willis is a personal finance editor for CNN Business News and the host for Open House. E-mail comments to 5tips@cnn.com.