The Internal Revenue Service typically mails an audit report to a taxpayer within a few weeks after conducting an audit. The report will explain any proposed changes to your tax return. Along with the report, you will receive an agreement form, a copy of IRS Publication 5, and a letter notifying you that the IRS allows 30 days to accept or appeal the proposed changes. After reviewing this information, the appropriate response depends on whether you agree or disagree with the audit report.
Agreement With an Audit Report
If you agree with the proposed changes, you should sign the audit report and mail it back to the IRS. The report will provide detailed information about any adjustments in taxes, interest and penalties. It will discuss payment options as well. If any tax is owed, you can either pay the full amount or request an installment agreement using IRS Form 9465.
A request for an audit reconsideration can be filed if you disagree with the results of an audit. This is an informal process in which the IRS re-examines the tax assessment. The guidelines for submitting an audit reconsideration request are outlined in Chapter 13 of the Internal Revenue Manual. At any time after an audit is completed, you can submit a letter requesting reconsideration to the IRS office listed on your tax return. Form 4549 and a copy of the original audit report must accompany the letter.
IRS Appeals Process
You have the right to appeal the audit report within 30 days of the date on the letter. If you are appealing an assessment of $25,000 or less, you can simply submit a letter requesting an appeal to the auditor. The letter should explain the reason for your disagreement. IRS Form 12203 will help you to prepare your request. A formal process is usually required to appeal an amount of more than $25,000. You will be required to submit detailed information, including a written protest, to the IRS Office of Appeals.
90-Day Letter and Appeal in the U.S. Tax Court
If you do not respond to the audit report within 30 days or if you disagree with the outcome of the IRS Appeals Process, the IRS will send you a 90-day letter. This is most well-known as a notice of deficiency. The IRS allows 90 days from the date listed on the notice to file an appeal in U.S. Tax Court.
Lisa M. Bieniek holds a J.D. from American University Washington College of Law. She is a licensed attorney in Massachusetts, as well as a writer. Bieniek is also completing a Master of Laws degree in international and European law.