What To Do If You Are Being Audited

What To Do If You Are Being Audited

You can be audited by:

  • mail,
  • you visiting an IRS office,
  • the IRS visits your office.

What are your options:

  • you can agree with the audit opinion
  • respond with a written protest (file an Appeal)

https://www.irs.gov/appeals/preparing-a-request-for-appeals? ? More information about the appeal request

You may submit a Small Case Request if the entire amount of additional tax and penalty proposed for each tax period is $25,000 or less. Form 12203, Request for Appeals Review

  • request a Fast Track Settlement? https://www.irs.gov/pub/irs-pdf/f14017.pdf? If the Fast Track Settlement fails the taxpayer still has a right to go to Appeals.

https://www.irsvideos.gov/Business/audits/FastTrackSettlement

  • Wait for the 90-day letter
  • File CDP hearing or Collection Appeal Request. Form 12153 or form 9423.

IMPORTANT! If the tax issue is raised and resolved in CAP (Collection Appeal Request) hearing, the taxpayer can’t raise the issue in the CDP hearing (unless new information is presented).

CAP hearing may prevent the taxpayer from contesting the issue in Tax Court.

  • File a Tax Court or District Court petition
  • post appeal mediation

It is important to prepare for your appeal. You must have all evidence that supports your case. Any new information presented will be reviewed by the Compliance Unit. Please, keep in mind that interest keeps accruing. If you are bringing a case law to consider at the appeals, court cases in your jurisdiction will have more weight than court cases elsewhere.

  • Consider settling your case.

Once a liability agreement is reached, you have options:

  • Installment agreement
  • Offer in Compromise

Early referral is working simultaneously partially in appeals and partially still in Audit.

Post-Appeals Mediation may resolve disputes while your case is still under Appeals’ consideration.

If Post-mediation fails then the Notice of Deficiency is issued.

Request the CDP? within 30 days(Form 12153). If you don’t request the hearing, you will lose your right to go to court.

Request equivalent hearing (no right to go to court).

More information about CDP: https://www.irs.gov/appeals/collection-due-process-cdp-faqs

Taxpayers can go to court to argue that the Appeal Officer abused their power.

Trust Fund recovery penalties can also to Appeals.

IRS Manual describes the IRS process.? https://www.irs.gov/irm

 

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