IRS Audits

The most common IRS audits are done through the mail where the IRS sends you a letter and asks you to mail in verification of certain items from your tax return.  Typically, correspondence audits are for missing documents in your tax return the IRS computers have attempted to find. These usually include W-2’s and 1099 income items or interest expense items. This type of audit can be handled through the mail with the correct documentation.  It is important that you respond to these mail requests because if you do not, the IRS will either deny the deduction in question, or increase your gross wages, which will lead to you having to pay more in taxes.

Tax Audits

The IRS can also conduct an audit by having you come down to their office of by having IRS auditor come to your office or home. The location of your audit is a good indication of the severity of the audit.  Audits where the IRS sends someone to your location are the most sever and involved kinds of audits.   Audits scheduled at an IRS office or at your home or office should be taken seriously because the IRS Auditor is generally a Revenue Agent, who receives more training and auditing techniques than a typical Tax Examiner.

IRS Appeals and U.S. Tax Court

If you don’t agree with the results of an IRS Audit, DON’T SIGN ANYTHING the IRS gives you.   If you sign and agree with the results of an IRS audit, you are going to be stuck with those results.  If you don’t agree on an audit, the IRS is required to issue you a 30 Day Notice or a 90 Day Notice of Deficiency.

If you receive a 30 day notice from the IRS you have the right to appeal your case to the Internal Revenue Service’s Appeals Division.  It is important that you do not ignore this notice.  Appealing your issue may allow you to present your case to an IRS appeals officer who will independently review and who may change the outcome of an audit or an offer in compromise.

If you receive a 90 day notice or a Notice of Deficiency, you have 90 days to file a petition with the United States Tax Court.  It is important that you do not ignore this notice.  Filing a tax court petition will allow you to bring your case before the U.S. Tax Court and allow a judge to review your case.  If you fail to response to the notice, you lose your right to bring your case in tax court, the IRS can immediately assess any tax liabilities that they have proposed, and the IRS may begin collecting on the tax liability.