The IRS is auditing my return. What now?
An audit is a review of whether a return is correct, not an accusation. It has rules, rights and deadlines, and how it ends depends heavily on how it is handled from the first letter.
Or book a 30-minute call about your situation and what to do next.
Talk to us about your IRS problemThis first phase is a fixed fee, set before work begins. Nothing in it obligates you to the next phase.
You do not have to do this alone.
The law gives you specific rights in IRS interviews.
Representation
An Enrolled Agent, attorney or CPA holding your power of attorney can represent you in the interview. The IRS cannot require you to attend with your representative unless it issues an administrative summons to you.
Law · IRC §7521(c)Stopping to consult
If you clearly say during an interview that you want to consult a representative, the interview must be suspended, unless it was initiated by an administrative summons.
Law · IRC §7521(b)(2)An explanation of the process
Before or at the first in-person interview, the IRS must explain the audit process and your rights in it.
Law · IRC §7521(b)(1)Recording
With advance notice, you may make an audio recording of an in-person interview at your own expense.
Law · IRC §7521(a)How far back the IRS can go.
Generally, the IRS has three years after a return is filed to assess additional tax. If more than 25 percent of the gross income stated on the return was omitted, it has six years. If no return was filed, or a return was fraudulent, there is no limit.Law · IRC §6501(a), (c)(1), (c)(3), (e)
The IRS may ask you to agree to extend the period. You have the right to refuse, or to limit the extension to particular issues or a particular period, and the IRS must tell you so each time it asks.Law · IRC §6501(c)(4)
From proposed changes to the Tax Court.
If the IRS proposes more tax and you do not agree, the dispute moves through defined steps.
- Proposed changesThe examiner proposes adjustments. You can agree, provide more support, or disagree.
- AppealsDisputed issues can go to the IRS Independent Office of Appeals, which is separate from the examiner. Eligible taxpayers get access to the non-privileged case file at least 10 days before the conference.
- Notice of deficiencyBefore assessing a disputed income tax deficiency, the IRS must issue a notice of deficiency. You then have 90 days (150 if addressed outside the United States) to petition the Tax Court without paying first.
IRC §7803(e) (Independent Office of Appeals; case file access for individuals with adjusted gross income up to $400,000 and other taxpayers with gross receipts up to $5 million); §6212 and §6213(a). The 90-day period is fixed by statute and is not extended by Appeals.
Answer what was asked, and keep the record clean.
Most audits are decided on documentation. We respond to the specific items requested, with support organized the way the examiner needs it, and keep every deadline in view, especially the 90 days after a notice of deficiency.Bridge's view · practitioner judgment
A letter proposing changes because income did not match IRS records (a CP2000) is handled differently from an examination.
We take it from here.
- We take controlOnce you sign the authorization, we deal with the IRS for you. Send us any IRS letter you receive.
- Exactly where you standWhat the examination covers, which years are open, and what the IRS has asked for.
- Your deadlines, risks and leverageIncluding response dates, any request to extend the assessment period, and appeal rights.
- Your Resolution RoadmapIn writing: where the audit stands and how we propose to respond.