What can I do if I don’t agree with an IRS audit? Dealing with a tax audit can be a daunting experience, especially when you find yourself in disagreement with the results of an audit. However, it’s crucial to know that there are avenues available to resolve such disputes. In this blog post, we will explore what to do when you don’t agree with an audit, with a specific focus on a vital option known as “Audit Reconsideration.”

What is Audit Reconsideration?

Audit Reconsideration is an IRS procedure designed to address disagreements related to assessments made by the IRS due to an audit or the creation of a Substitute for Return (SFR) when a taxpayer fails to file a return. This process allows taxpayers to present additional information and request a review of their tax liability.

When can taxpayers request an Audit Reconsideration?

Taxpayers can request an Audit Reconsideration in various situations, including:

  • Failure to appear for an audit.

  • Relocation without receiving correspondence from the IRS (e.g., CP-2000 notices).

  • Possession of additional information not provided during the initial audit.

  • Disagreement with the assessment resulting from the audit.

  • Unpaid tax liability.

  • Denial of tax credits.

When won’t the IRS Accept an Audit Reconsideration?

It’s important to be aware of situations in which the IRS may not accept an Audit Reconsideration request. These include:

  • Previous agreement to pay the assessed amount through a final and conclusive closing agreement (Form 906), compromise agreement, or an agreement on Form 870-D with the IRS Independent Office of Appeals.

  • A final determination on the liability issued by Tax Court or another court.

  • Failure to file a tax return.

  • Tax owed due to final partnership item adjustments under TEFRA.

Types of Reconsiderations:

Audit Reconsideration encompasses various scenarios, and it’s not limited to one specific type. Some key types include:

  • Audit Reconsideration: This involves reevaluating the results of a prior audit where additional tax was assessed and remains unpaid, or a tax credit was reversed. Taxpayers must provide information that was not previously considered during the initial examination.

  • SFR Reconsideration: An SFR, or Substitute for Return, may be generated by the IRS when a taxpayer does not file their own return. This type of reconsideration allows taxpayers to provide additional information to correct discrepancies.

  • Additional Types: Other forms of reconsideration can include claims for a credit or refund not previously reported or allowed, or requests for abatement of tax, penalty, and/or associated interest. The “underreported” condition arises when income reported to the IRS by payors is not reported by the taxpayer, leading to proposed tax adjustments.

Conclusion:

When you find yourself at odds with the results of a tax audit, remember that Audit Reconsideration is a valuable option to address your concerns. Understanding the circumstances under which you can request this reconsideration, as well as the types of reconsiderations available, is essential. Seeking professional assistance, such as that provided by tax problem resolution experts like Douglas Dick and the team at Sancus Tax Relief, can also greatly improve your chances of achieving a fair and favorable resolution to your tax dispute. Contact us.