An IRS audit is a serious matter which involves a review of a taxpayer’s accounts and financial information. The goal of the audit is to ensure the taxpayer correctly reported information according to the tax laws. The IRS is also looking to verify the reported amount of tax is correct.
The agency must follow proper protocol when moving forward with an audit. A failure to do so can mean the IRS is unable to proceed with its findings. In one example, the IRS’ failure to move forward in a timely manner meant it lost out on the ability to hold a taxpayer accountable for a hefty fine. This case highlights the importance of carefully reviewing the documents related to the audit and holding the IRS accountable for failing to follow the rules-such as important deadlines.
What is the process for an audit?
The process generally includes the following steps:
- Notification: The IRS sends a notice stating that you have been selected for an audit. This communication will detail what aspects of your tax return are under review and what documents you need to provide. This is likely sent in the US mail. Do not respond to notification through an email, social media account, or text message. This is likely a scam.
- Review: Either through mail (correspondence audit), in an IRS office (office audit), or at a location like your home or business (field audit), the IRS will examine your records and ask questions about your financial information.
The IRS will make a decision after it reviews the evidence. If they find discrepancies, you might owe additional tax. If you agree with their findings, you can settle any owed amounts. If you disagree, you can request further review or appeal the decision.
How do I appeal an IRS decision?
If you disagree with the results of an IRS audit, you have the right to appeal the decision. The appeals process is meant to help resolve tax disputes without going to court. The first step is generally to file a formal protest. This is essentially a written protest in which you explain why you disagree with the IRS findings. This can lead to a conference to discuss the matter. You can better ensure a successful outcome by presenting your case with a clear understanding of tax laws and IRS procedures.
An IRS audit decision is not final. You can fight back. If you believe the agency’s findings are wrong, consider putting together an appeal.
