Facing an audit can be a stressful experience, especially when you believe the outcome is not in your favor. However, the Internal Revenue Service (IRS) understands that human errors or miscommunications can occur during the auditing process. That’s why they provide an opportunity for an audit reconsideration request to rectify a mistake in the process. In this blog post, we will guide you through the steps of formally requesting an audit reconsideration.
Let’s begin with,
What is an Audit Reconsideration?
An audit reconsideration is a process that allows taxpayers to request a review of their tax return after the completion of an audit. It may be appropriate if you believe factual errors were made during the examination or if you have new or additional information you didn’t present initially.
When Do You Know You Need To Apply For An Audit Reconsideration Request?
Deciding when to apply for an audit reconsideration request with the IRS can be pivotal for many taxpayers. This process is essential if you believe there has been a misunderstanding or error in your tax audit
- Errors or Inaccuracies: Identify substantial errors or inaccuracies in the original audit assessment that may impact your tax liability.
- New Information: Discover new information not considered during the initial audit, which could alter the outcome.
- Missed Deductions or Credits: Determine if any eligible deductions or tax credits were overlooked during the audit process.
- Mathematical Mistakes: Check for mathematical errors in the audit calculations that could lead to an incorrect assessment.
- Procedural Errors: Identify any procedural errors made by the tax authorities during the audit that could have affected the outcome.
Remember, an audit reconsideration of the IRS is a complex process, and seeking professional guidance, especially from a former IRS agent is crucial to ensure a comprehensive and accurate submission.
6 Steps to Formally Request an Audit Reconsideration
If you disagree with the results of an IRS audit, you can formally request an audit reconsideration. Here are six steps to guide you through this crucial process, ensuring you handle it effectively and efficiently.
- Review the Audit Report: Carefully review the audit report you received from the IRS. Understand the reasons for any adjustments made and assess whether they were accurate or if there is factual information missing.
- Gather Supporting Documentation: Collect all relevant documents, such as receipts, bank statements, or any other evidence that supports your claim for reconsideration. Ensure that you have all necessary documentation ready before proceeding.
- Prepare a Written Statement: Write a formal letter to the IRS explaining why you believe an audit reconsideration is appropriate. Clearly and concisely detail the mistakes or omissions made during the original audit, or include any new information you wish to present. This letter will serve as your formal request for an audit reconsideration.
- Attach Supporting Documentation: Include copies of the supporting documents you gathered earlier that substantiate your claims or provide clarity. Ensure that everything is well-organized and clearly labeled.
- Mail Your Request: Send the formal request for an audit reconsideration and the supporting documentation to the IRS office conducting the original audit. Make sure to use certified mail or a reputable delivery service to ensure proof of receipt.
- Follow Up and Keep Records: Once you have mailed your request, make note of the date and keep copies of all documents for your records. This will help you track the progress of your request and serve as evidence if any discrepancies arise.
Importance of Professional Assistance in IRS Reconsideration Audits
- Professionals possess in-depth knowledge of complex tax laws and regulations. They can navigate the intricate IRS code, ensuring accurate interpretation and applications.
- Professionals are well-versed in IRS audit procedures and protocols. They understand the nuances of the reconsideration process, minimizing errors and delays.
- Professionals can communicate with the IRS on behalf of the taxpayer, articulating complex issues clearly and concisely. Clear communication helps in presenting a compelling case for reconsideration.
- Professionals know what documentation is crucial for a successful reconsideration. They can help gather and organize evidence effectively, strengthening the taxpayer’s position.
- Professionals can identify potential risks and pitfalls in the audit reconsideration process. Their experience allows them to proactively address issues, reducing the likelihood of adverse outcomes.
What Does the IRS Do After You Have Applied For Audit Reconsideration?
This is a critical phase where the IRS takes several steps to reevaluate your case based on the new information you’ve provided. Here’s a brief overview of the actions the IRS typically undertakes once your application for audit reconsideration is in their hands
1. Initial Review and Acknowledgment:
- Upon receiving an application for IRS reconsideration, the IRS initiates an initial review to ensure all required documents are submitted
- Taxpayers typically receive an acknowledgment from the IRS, confirming the receipt of their reconsideration request.
2. Assignment to an Appeals Officer:
- The case is assigned to an Appeals Officer specializing in reconsideration requests.
- The officer reviews the taxpayer’s documentation, the initial audit findings, and any additional information provided during the reconsideration process.
3. Analysis and Evaluation:
- The Appeals Officer thoroughly analyzes the taxpayer’s arguments and supporting evidence.
- They review applicable tax laws, regulations, and precedents to assess the merits of the taxpayer’s position.
4. Communication and Additional Information:
- The Appeals Officer may communicate with the taxpayer or their representative to seek clarification or request additional information.
- This communication can be in the form of written correspondence, phone calls, or face-to-face meetings.
5. Settlement Negotiations (if applicable):
- In cases where there is disagreement on certain issues, the Appeals Officer may engage in settlement negotiations with the taxpayer.
- The goal is to reach a mutually acceptable resolution considering both the taxpayer’s concerns and the IRS’s position.
6. Issuance of Final Determination:
- After a thorough review and any necessary negotiations, the Appeals Officer issues a final determination.
- This determination outlines the IRS’s position on the taxpayer’s reconsideration request, either upholding the original assessment, making adjustments, or fully accepting the taxpayer’s position.
- The taxpayer is notified of the final decision, and if adjustments are made, details regarding any changes to tax liabilities or refunds are provided.
Requesting an audit reconsideration allows you to rectify errors or provide additional information that may alter the outcome of your initial audit. By following these friendly steps, you can formally request an audit reconsideration from the IRS. Remember to maintain clear communication and provide accurate supporting documentation to support your claims. Although audits can be stressful, understanding the process and taking appropriate steps can help resolve discrepancies and achieve a fair outcome.