To ensure acceptance by the Internal Revenue Service, the request for an IRS Audit reconsideration must be carefully prepared.
The IRS audit reconsideration is an option you must explore if the IRS has made an assessment based on your return and imposed an additional tax liability. Through this process, you can disagree with the tax assessment of the IRS and provide it with new documents. This necessary documentation will then be used to reconsider the assessment and potentially remove the additional liability.
Certain requirements need to be met before a request for reconsideration can be filed. The IRS usually responds to these requests within 30 days.
POTENTIAL REASONS FOR AN IRS AUDIT RECONSIDERATION REQUEST
Once you receive thatInternal Revenue Serviceaudit notice things might seem bleak. TheIRSis a department that not many people like to deal with voluntarily. It’s no secret that theIRSis not in the business of giving money back totaxpayers, and instead is keenly focused on finding returns that signalIRSred flags and possibletax evasion penalties.
Complianttaxpayerslike yourself are usually apprehensive about taking on theIRS. Some feel that perhaps going against itstax assessmentis only going to do more harm than good. They accept the assessment and often end up paying exorbitant amounts that could have otherwise been reduced.
Having a good tax attorney to help your optimize your taxes can help you to avoid this and other tax issues.
Some people are unaware of both theIRSaudit appealand the reconsideration process. Once they receive the department’s assessment, they believe that it can’t be challenged and that they’ll have to pay up the entire amount.Ataxpayerhas recourse toaudit reconsiderationprovided that they have a valid reason.
It’s pertinent to note that not every reconsideration request will be reviewed or accepted. TheIRSis under no compulsion to do so. However, you can submit a request if you meet all of the following conditions.
- You didn’t appear for the audit appointment
During an audit, you’re required to present documents that support the income, credits, or deductions that you’ve claimed on your return. The details about how and when to present these records will be mentioned in the notice. If the audit is being conducted by mail you will be required to mail the records to the address on the notice. If the audit is being conducted in person, you’ll need to take the records with you.You may file a reconsideration request if you were unable to appear for your audit appointment or mail the records. There should be a reasonable justification as to why the audit notice wasn’t complied with. If it’s enough to satisfy the IRS it may then reconsider the audit results. - You moved and didn’t receive a notice from theIRS
TheIRSoperates under the assumption that if it has dispatched an audit notice, thetaxpayerwould have received it. The department will proceed with the audit if it doesn’t hear back. That’s even if the notice was never received by thetaxpayerin the first place because they moved elsewhere.Missed correspondence from theIRSis a good enough reason to request reconsideration of the audit. You’ll need to provide information that confirms that you had indeed moved and that the notice was sent to an address no longer in use by you. - You disagree with the audit assessment
A reconsideration request can also be made if you disagree with the assessment that theIRShas made from an audit of your return. This also applies to an assessment created under the authority ofInternal Revenue Code6020(b),Substitute for Return(SFR).The SFRIRSauthority enables the department to file returns on behalf of thetaxpayerswhen they fail to file a return. TheIRSfiles the returns based on the Information Return Program and any other data that may be available to it. - You have new information that wasn’t provided initially
It’s possible that new information surfaces after you have been audited. This information about your income, expenses, or deductions may help theIRSmake a fair assessment of yourtax liabilities.The department may be willing to reconsider its assessment on this ground as long as the new information is material relevant to your audit. The information must not have been previously considered during the original examination.
IRS RECONSIDERATION REQUIREMENTS
There’s no guarantee that your reconsideration request will be reviewed or accepted. It has set out some requirements that must be met for your request to be considered.
- You must have filed atax return.
- The tax assessed must remain unpaid or theIRSmust have reversed any tax credits that you are disputing.
- You must identify which adjustments you’re disputing
- You must provide new information that was not considered during the original examination
- Whether there was anIRScomputational or processing error in assessing theamount of taxdue from you
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THE AUDIT RECONSIDERATION PROCESS: HOW TO REQUEST IRS AUDIT RECONSIDERATION
A request for reconsideration must be diligently prepared to ensure its acceptance by theInternal Revenue Service.
1. Reviewaudit reportand gather documents
TheIRSsends you anoriginalauditreportthat details how it has made the assessments. Review it carefully to find out which items you’d like the department to reconsider. This will also enable you to gather the appropriate documentation to support your request.
Remember, thesupporting documentationthat you provide must be new information that hasn’t been examined before. It must be for thetax yearin question. If you’re already paid theamount duein full, you’ll need to file aformal claimusingForm 1040Xinstead of a request for reconsideration.
2. Submit your documents to theIRS
All relevant documents need to be submitted to theIRS. This will include a copy of youraudit reportand copies of all documents that you’re relying on to support your request. This may include Forms 1099, bank statements, loan documents, etc.
Copies of all documents that were previously provided to theIRSshould also be included. You must also include a letter that highlights your reasons for seeking reconsideration. This can either be throughIRSForm 12661 or a simple letter.
3. AttachIRSform 12661
TheIRSaudit reconsiderationform 12661 is the official letter thattaxpayerscan fill out to request a reconsideration. You can also write a simple letter to theIRSinstead of using this form. The next section provides directions on how to write this letter.
If usingIRSform 12661, fill out the sections to provide information relevant to your request. The form has sections for highlighting the disputed assessments and providing the reasons why you disagree with them.
4. Attachaudit reconsiderationform 4549
IRSForm 4549, also known as the Income Tax Examination Changes letter, provides a summary of the changes proposed by the department for yourtax returnin addition to any penalties and interest determined as a result of the audit.
You’ll need to provide a copy ofIRSform 4549 with your request for reconsideration. It will substantiate the disputes that you’ve raised.
HOW DO I WRITE AN AUDIT RECONSIDERATION LETTER?
It’s not necessary to use Form 12661 as your request for reconsideration can also be made through a simple letter addressed to theIRS. If you opt to write a letter instead, ensure that it provides all of the relevant information to support your case.
At the very least, this letter should highlight the reasons why you’re asking for a reconsideration, the assessments that you’re disputing, and provide an overview of the new information that you’re relying on.
Mosttaxpayerswho decide to take this route try to find anaudit reconsiderationletter template that they can adapt as they’re often unsure about how the letter needs to be structured. We’ve created a free sample for you that’s easy to understand.
IRSAudit reconsiderationletter sample
We have created thisIRSaudit reconsiderationletter templateto helptaxpayerslooking to dispute audits hit the ground running. However, it’s important to understand that every audit case is unique. There’s no one-size-fits-all solution here.
The reconsideration letter that you send must properly address the specifics of your case and present all information in a manner that helps the department reach a favorable decision in your case. Obtaining professional assistance in drafting the letter could make all the difference.
Need help drafting anaudit reconsiderationtemplate?
Remember, you have one shot ataudit reconsiderationso everything needs to go without a hitch. Even though the process of filing for reconsideration may seem simple enough, there are many technicalities in which to be mindful. The best way to avoid these difficulties is to seek the professional assistance of anIRSaudit attorney.
At Brotman Law, we are qualifiedtax professionalsthat can help you avoid the pitfalls and guide you through the entireaudit reconsiderationprocess.Contact ustoday forIRStax representationand we’ll connect you to anexperienced tax attorneythat can solve yourtax issues.
HOW LONG DOES AUDIT RECONSIDERATION TAKE?
Once you’ve sent in your request, expect to hear back from theIRSwithin 30 days but it often happens that the department takes much longer to respond. It may take up to several months before you get a response.
If you’d like to expedite your request, write to theTaxpayerAdvocate‘s Office and request them to expedite your case. You’ll need to fill out Form 911 titled Request forTaxpayerAdvocateAssistance.
If theIRSdecides to reject your request or you don’t respond to a request foradditional informationwithin 30 days, the collection activity may resume after thefinal determination.
If it accepts your request, theadditional taxthat has been assessed will be removed. TheIRSmay also decide to partially reduce (abate) thetax debt.
If you disagree with the results of the reconsideration, you can request anAppeals Conferenceat theappeals office, pay theamount duein full and then file aformal claimor simply do nothing. In that case, theIRSwill send you a bill for theamount due.
WHERE TO SEND IRS AUDIT RECONSIDERATION REQUESTS
Theexamination reportthat you receive from theIRSofficewill include an address where you need to send all of thefurther informationfor your reconsideration request. If it doesn’t mention an address, you can locate your region’s office through theIRSwebsite.
RegionalInternal Revenue Servicecampuses are located in Andover, Atlanta, Austin, Cincinnati, Fresno, Holtsville, Kansas City, Memphis, Ogden, and Philadelphia.
OtherIRS.govaudit reconsiderationcontact information
There isn’t a directIRSreconsideration department number that you can dial to speak to someone about your case. However, you can call 1-877-777-4778 toll-freephone numberto speak to your localTaxpayerAdvocateif you face a significant hardship due to atax problem.
Similarly, there’s no singleIRSreconsideration department fax number that you can fax your documents. You’ll need to send the documents to the specificIRScampus shown on yourexamination reportand it should include the correct phone and fax numbers.
FAQS
What percentage ofIRSaudits are appealed?
For the vast majority oftaxpayers, the chances of getting audited by theIRSis less than 1%. Those making $25,000 – $50,000 a year have a 0.4% chance of being audited. Only a small percentage of thoseIRSaudits are appealed by thetaxpayersaffected.
If successful,how longdoes it take to get your refund after an audit?
Tax lawsdo not provide a specific timeframe for refunds to be processed. Even if your return was audited, there’s a good chance that you’ll still get your refund as long as there are no issues with the return. It normally takes between 4-8 weeks to get your refund.
