Receiving a notice of an IRS audit can be stressful. However, if you believe the outcome of your audit is incorrect or if new information comes to light, you have the right to request an IRS audit reconsideration. This process allows taxpayers to challenge the results of an IRS audit and potentially adjust the amount owed or correct the audit findings. Here’s a step-by-step guide to help you navigate the process of requesting audit reconsideration.
Before you begin the process of requesting audit reconsideration, it’s important to understand the circumstances under which you may be eligible. The IRS will generally consider an audit reconsideration request if:
However, the IRS will not accept an audit reconsideration request if you’ve already agreed to the results of the audit by signing a settlement agreement, or if the U.S. Tax Court or another court has already ruled on your case.
Once you’ve determined that you’re eligible for audit reconsideration, the next step is gathering all relevant documentation to support your case. This step is critical because the IRS will base its reconsideration on the strength of the new evidence you provide.
Some common types of documentation you may need to gather include:
Ensure that all documents are accurate, legible, and relevant to the specific issues you are disputing. The more organized your paperwork, the easier it will be for the IRS to review your request.
There is no official IRS form specifically for audit reconsideration requests, but you should prepare a formal written statement outlining why you are requesting reconsideration and what changes you believe should be made to the audit findings.
Your letter should include the following:
The letter should be clear, concise, and professional. Include any key points or explanations that will help the IRS understand why reconsideration is warranted.
Once you’ve gathered your documentation and prepared your written statement, it’s time to submit your request to the IRS. The submission process involves mailing your audit reconsideration request and supporting documents to the IRS office that conducted the audit. This is typically the address listed on your audit report or notice of tax assessment.
Make sure to:
Once your request is submitted, the IRS will review your case. The process can take several months, depending on the complexity of the issues and the IRS’s current workload.
While waiting, it’s important to note that penalties and interest may continue to accrue on any outstanding tax liability. If you’re concerned about the growing balance, consider making a partial payment while your audit reconsideration is being processed. You can also contact the IRS to inquire about the status of your request if you haven’t heard back within a reasonable timeframe.
In some cases, the IRS may request additional documentation or clarification while reviewing your audit reconsideration. If this happens, be prompt in responding to their requests and provide any additional information as needed.
Timely communication is critical to keeping your case moving forward. Delays in providing information or ignoring requests can slow down the process or lead the IRS to deny your request for reconsideration.
After reviewing your audit reconsideration request and all supporting documentation, the IRS will issue a final decision. The outcome of the reconsideration can fall into one of three categories:
You will receive a written notice of the IRS’s decision, detailing the changes (if any) to your tax liability.
If the IRS denies your audit reconsideration request or does not reduce your tax liability as expected, you still have options. You can appeal the IRS’s decision through the IRS Office of Appeals. This is an independent office within the IRS that handles disputes between taxpayers and the IRS.
To file an appeal, you must submit a formal written protest, typically within 30 days of receiving the IRS’s final decision. The appeal process allows you to present your case to a different set of IRS officials for further review.
Requesting IRS audit reconsideration can provide a second chance to resolve tax disputes and reduce your liability. By following the proper steps, gathering strong documentation, and presenting a clear case, you increase your chances of a successful outcome. Keep in mind that communication and timely responses are key throughout the process.
If you find the audit reconsideration process overwhelming or complex, seeking assistance from a tax professional can help you navigate the system and advocate on your behalf.