IRS Audit Reconsideration

An audit reconsideration is a procedure that you follow to request that the IRS examine your return again. You may want to do this if an assessment is made that you disagree with. The assessment can be made from a return you filed, a return the IRS filed for you as an Substitute For Return (SFR), or under a 6020b for payroll. Any money you want back that was overpaid should be done as an amended 1040X or a claim for refund.

Acceptable Reasons The IRS Will Open Up The Audit

• You are now in the possession of information that was not personally submitted to the auditor. This information will be a reasonable adjustment in your favor.
• You are trying to replace an SFR that the IRS filed for you and they didn’t, or wouldn’t, process the return you sent in.
• You still have unresolved errors in the processing, or computations, from an audit assessment.

Don’t file for audit reconsideration if you are doing it for the following reasons, or under the following circumstances:

• You signed the audit report. The closing agreement Form 906 is considered final by the IRS.
• You signed an offer in compromise agreement pertaining to the years in question.
• You signed an agreement with appeals form 870-AD.
• You already had a determination from tax court concerning the liability.

How To Apply For Audit Reconsideration

Even if the IRS audits you when you haven’t filed, the instructions say that…

1. …you must file a return.
2. …you should submit a written request of changes with any documentation that was not previously considered
3. …you should submit contact information.

Other Important Facts Related to Audit Reconsideration

1. You can get a partial reduction of the liability.
2. If you are in a payment plan for the years in question, you must continue to make your payments. This is true for all outstanding liabilities. If you file an offer in compromise, appeal, etc. then the collection division must be in agreement concerning the stopping of collections.
3. If you disagree with the decision concerning the audit reconsideration, you can file an appeal. In practice, we usually try to get the audit division to open the audit up again. Otherwise, we go directly to appeals.
4. Whether or not you file an audit reconsideration you can always pay the amount in full and file a formal claim for refund Form 1040X. Remember that claims must be filed within 3 years from the date the return was filed or 2 years from the date the taxes were paid; whichever is later. If the claim is denied, you can appeal the denial or file a tax court claim for refund.

Most taxpayers don’t understand the various options they have to resolve issues with the IRS. After 30 years, we have experienced the benefits of using the various departments within the IRS, and the benefits of using the tax laws applicable to our clients’ situations. We want the opportunity to show you these benefits.