You have the chance to agree with their changes or explain why you think your original return was correct. There are a few reasons why the IRS might CARES Act send you an audit letter. Maybe your numbers don’t match their records, or you forgot to include something on your tax return.
Publication 5
Accordingly, most audits will be of returns filed within the last two years. If the IRS selected your return for audit (also called examination), it doesn’t automatically mean something is wrong. Once the IRS completes the examination, it may accept your return as filed or propose irs audit changes. These changes may affect the amount of tax you owe (a proposed deficiency) or the amount of your refund. It’s just a process to make sure everything is correct with your federal tax return.
Audits by Mail
They can even ask the IRS appeals office for you if something seems wrong. They just want to sort out any mix-ups with your taxes, like making sure everyone plays the game fairly. Compare the information in the notice or letter with your return. If you agree, note the corrections on your personal copy of the tax return and keep it for your records. The best thing to do when receiving an IRS audit letter is to contact a tax professional. A CPA or tax attorney will know exactly how to handle your unique circumstances and reasons for the audit.
- If you miss the deadline, you won’t be able to have a judge review your case without first paying the amount due.
- If we’re conducting your audit in person, bring the records with you.
- Ignorance or delayed response can lead to the IRS moving forward with their collection process on unpaid taxes.
- Form 4549, Report of Income Tax Examination Changes, a report showing the proposed adjustments to your tax return, will be enclosed with the letter.
Credits & Deductions
Compare the IRS’s proposed changes in the letter to your tax return to make sure you and the IRS are starting from the same point, with the same figures (numbers on your tax return). Review the letter and any attachments to find out what information you need to gather. You should expect to hear from the IRS about your reconsideration request within 30 days.
- You don’t need to reply unless we specifically ask you to.
- If you do not agree, respond to the IRS by the due date on the letter.
- Section on our Home page that allows you to enter the notice or letter number to find out more about it, what action you may need to take, and where in the IRS process it falls.
- They know that it’s better to collect some money than no money at all.
- However, it selects some for an additional review or audit to determine if you accurately reported your income, expenses, and credits.
- TAS helps taxpayers resolve problems with the IRS, makes administrative and legislative recommendations to prevent or correct the problems, and protects taxpayer rights.
Say that the audit notice states https://www.bookstime.com/ that your interest deductions, charitable contributions, and travel write-offs will be reviewed. If you’re solid on interest and contributions but shaky on travel, try to steer the audit to your strong suits first. Over the past several years, the IRS has been doing more of these types of audits.
