What can I do to appeal an IRS tax audit?

You may ask to speak to the Appeal Officer's manager. If you cannot agree with the manager, you may file a petition in the U. S. Tax Court after the formal statutory notice is issued. Seek a good tax attorney to advise you if your case has merit and to help you through this process.

I do not understand your question. If you are "working with an appeals officer based on the results of an audit," then what you need to "do at this point" is to convince the Appeals officer that your position is correct and that the auditor was wrong. This is not a question that can be answered in generalities. This is a question that must be addressed in specifics. However, if you wish a generality it is as follows: Auditors cannot compromise. Their job is to make a decision based on the facts. Therefore, once it is clear that you are not going to reach a good result with an auditor, you should request a meeting with the manager. If you get nowhere with the manager, then stop providing arguments and facts. Instead, have the auditor write up the case and get to Appeals. The way to get a good result at Appeals is to provide "new facts" and "new arguments" that were not made to the auditor. Think about it. If all you have to give the Appeals officer are the same facts and arguments that got rejected by the auditor, you have put the Appeals officer into the awkward position of having to overrule someone who works for the same organization and may well work in the same building as the auditor. By contrast, if you have "new facts" and "new arguments" that were not available to the auditor, you have made it easier for the Appeals officer to rule in your favor. So, again, once it is clear that an audit will not go your way, stop providing facts and arguments.