Tax Audit Protests And Appeals

Jul 10, 2018 | Tax Audit

The thought of tax audit by the IRS called an “examination”, frighten most of the taxpayers. Strong emotions are evoked just by mentioning the IRS from people who suspect that the IRS auditor will increase the tax liability rather than giving the accurate assessment of the taxes. However, if the taxpayer disagrees with the IRS results then they have right to file the appeal. Also, in response to the tax levy, tax lien, a penalty, a rejection of the offer, or disagreeing with the tax liability, taxpayers can also file the income tax appeal.

How IRS Determine the Tax Audit?

The tax audit is calculated by the computer programs which tax returns are probably to be in the error. Then the auditor approaches the individual and a line by line analysis is conducted on their personal finances. Other factors that might trigger the IRS audit involves the high amount of the tax deductions compared to erroneous tax items, income, or not including a proper explanation or proof for the major losses.

Audit Reconsideration

Tax disputes are resolved through an informal process of audit reconsideration without taking the issue to the court.

When to Request Audit Reconsideration?

There are two cases when audit reconsideration is requested:

  1. The IRS audited the tax return and taxpayers disagree with the audit assessment.
  2. The tax return was created by IRS and taxpayer disagree with the result.

The audit reconsideration request will only be accepted by IRS if:

  1. Submitting new information which affects the amount of tax owed.
  2. Tax credits denied that were deserved.
  3. If it doubted that errors were made by IRS while assessing the tax or processing the return.
  4. The taxpayer file the tax return after IRS creates tax return.

Note: IRS may not change the original assessment even if it accepts the request. To learn more, about auditing visit

Rejection of Audit Reconsideration Request

The audit reconsideration request will not be accepted if:

  1. Any sort of payment is made already with the IRS like installment agreements, closing agreements, offers-in-compromise, etc.
  2. Any tax court in the U.S has issued the final determination already of the tax liability.
  3. As per the Tax Equity Fiscal Responsibility Act (TEFRA) 1982 “final partnership item adjustments” is made under the tax return.

Audit Reconsideration Process

Following procedure is followed to begin the process of audit reconsideration.

  1. File the tax return if not done already.
  2. Write a letter to IRS to inform them about the changes that wished to be considered.
  3. Include enough documentation as possible that supports the position of pleader and the examination report as well.
  4. Include the telephone numbers of day and evening time to indicate the best time to contact.
  5. Mail documentation and letter to the IRS campus indicating the examination report.

Once the IRS consider the request, and if they need more information they will contact. Whether the tax is reduced, IRS initially assessed or not, now pleader have the choice to pay the tax liability or make an appeal.

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