But, if the issues are not entirely clear, are close-calls, or legally debatable, Appeals Officers, unlike an examining agent, have settlement authority. However, the process can take anywhere from four to eighteen months (or more) to complete. Meanwhile, interest continues to run on whatever tax liability is finally settled upon.
Rather, in many cases, the IRS simply mails out a “math error notice” which indicates that you have not made proper calculations on your return. Other audits are correspondence audits, in which the IRS simply mails you a letter requesting additional clarification about your return. The IRS cannot simply shift examination resources from single issue correspondence audits to more complex higher income audits How to Handle an IRS Audit because of employee experience and skillset. A GS-8 tax examiner is not trained to conduct a high income, high wealth taxpayer audit. In order to increase parity of numbers of taxpayers audited, the IRS must reallocate high-graded resources from certain issues to high income, high wealth taxpayer returns. Further, the rate of attrition is significantly higher among these more experienced examiners.
Tips to Handle an IRS Audit (Should You Ever Be Audited)
If you are unable to submit the request by fax, mail your request to the address shown on the IRS letter. We can ordinarily grant you a one-time automatic 30-day extension. We will contact you if we are unable to grant your extension request. However, if you received a «Notice of Deficiency» by certified mail, we cannot grant additional time for you to submit supporting documentation.
Once you identify the type of tax audit that’s being conducted, you’ll know—or at least have a better sense of—what’s involved. For audits conducted by in-person interview – If your audit is being conducted in person, contact the auditor assigned to your audit to request an extension. For any delivery service you may use, always request confirmation that the IRS has received it. For example, if you use the US Postal Service, you can request one of their additional services to ensure delivery confirmation. They may accept it; or if the auditor notes something questionable, they will identify the items noted and forward the return for assignment to an examination group. The letter and attachments will list the information you need to gather.
File
If you disagree with the examiner’s findings, you have the right to an administrative appeal. If you feel the examiner was being unreasonable on any issue or issues, you can first request a meeting with the examiner and his/her group manager. Managers will sometimes reverse the examiner if circumstances warrant. If that avenue fails, or you feel it would not be helpful, the next step is to advise the examiner that you will not agree with the proposed adjustments. Examiners usually try to persuade taxpayers to do «partial agreements» in which the taxpayer agrees to those adjustments that he or she does not dispute. Only the disputed items are then written up as «unagreed.» Partial agreements can make sense in many cases by simplifying the issues.
Compare the IRS’s proposed changes in the letter to your tax return to make sure you and the IRS are starting from the same point, with the same figures (numbers on your tax return). Review the letter and any attachments to find out what information you need to gather. Always be polite and remember that any of the three types https://www.bookstime.com/articles/how-to-calculate-workers-compensation-cost-per-employee of audits are formal interactions. Never lie to the agent about anything, or your situation will only get worse. Be honest and open, even if they ask a question and you don’t know the answer. It is easy to become frustrated or defensive if the IRS has made a mistake or if you are confused about why they are contacting you.
Audit preparation: 5 tips for a successful IRS audit
In these events, the IRS may add additional years, but usually not more than six years. Furthermore, it is beneficial to have your tax preparer and bookkeeper present during the process. They are able to answer questions quickly and thereby expedite the audit process. We have compiled some of our best tips to help you through the process. These can be made for tax evasion, filing a false return or even filing no return at all.