To ensure acceptance by the Internal Revenue Service, the request for an IRS Audit reconsideration must be carefully prepared.
How to Request IRS Audit Reconsideration (Sample Letter Included)
The IRS audit reconsideration is an option you must explore if the IRS has made an assessment based on your return and imposed an additional tax liability. Through this process, you can disagree with the tax assessment of the IRS and provide it with new documents. This necessary documentation will then be used to reconsider the assessment and potentially remove the additional liability.
Certain requirements need to be met before a request for reconsideration can be filed. The IRS usually responds to these requests within 30 days.
Potential reasons for an IRS audit reconsideration request
Once you receive that Internal Revenue Service audit notice things might seem bleak. The IRS is a department that not many people like to deal with voluntarily. It's no secret that the IRS is not in the business of giving money back to taxpayers, and instead is keenly focused on finding returns that signal IRS red flags and possible tax evasion penalties.
Compliant taxpayers like yourself are usually apprehensive about taking on the IRS. Some feel that perhaps going against its tax assessment is only going to do more harm than good. They accept the assessment and often end up paying exorbitant amounts that could have otherwise been reduced.
Having a good tax attorney to help your optimize your taxes can help you to avoid this and other tax issues.
Some people are unaware of both the IRS audit appeal and the reconsideration process. Once they receive the department’s assessment, they believe that it can’t be challenged and that they’ll have to pay up the entire amount. A taxpayer has recourse to audit reconsideration provided that they have a valid reason.
It's pertinent to note that not every reconsideration request will be reviewed or accepted. The IRS is under no compulsion to do so. However, you can submit a request if you meet all of the following conditions.
- You didn't appear for the audit appointment
During an audit, you're required to present documents that support the income, credits, or deductions that you've claimed on your return. The details about how and when to present these records will be mentioned in the notice. If the audit is being conducted by mail you will be required to mail the records to the address on the notice. If the audit is being conducted in person, you'll need to take the records with you.
You may file a reconsideration request if you were unable to appear for your audit appointment or mail the records. There should be a reasonable justification as to why the audit notice wasn’t complied with. If it's enough to satisfy the IRS it may then reconsider the audit results.
- You moved and didn't receive a notice from the IRS
The IRS operates under the assumption that if it has dispatched an audit notice, the taxpayer would have received it. The department will proceed with the audit if it doesn’t hear back. That’s even if the notice was never received by the taxpayer in the first place because they moved elsewhere.
Missed correspondence from the IRS is a good enough reason to request reconsideration of the audit. You’ll need to provide information that confirms that you had indeed moved and that the notice was sent to an address no longer in use by you.
- You disagree with the audit assessment
A reconsideration request can also be made if you disagree with the assessment that the IRS has made from an audit of your return. This also applies to an assessment created under the authority of Internal Revenue Code 6020(b), Substitute for Return (SFR).
The SFR IRS authority enables the department to file returns on behalf of the taxpayers when they fail to file a return. The IRS files the returns based on the Information Return Program and any other data that may be available to it.
- You have new information that wasn't provided initially
It’s possible that new information surfaces after you have been audited. This information about your income, expenses, or deductions may help the IRS make a fair assessment of your tax liabilities.
The department may be willing to reconsider its assessment on this ground as long as the new information is material relevant to your audit. The information must not have been previously considered during the original examination.
IRS reconsideration requirements
There's no guarantee that your reconsideration request will be reviewed or accepted. It has set out some requirements that must be met for your request to be considered.
You must have filed a tax return.
The tax assessed must remain unpaid or the IRS must have reversed any tax credits that you are disputing.
You must identify which adjustments you're disputing
You must provide new information that was not considered during the original examination
Whether there was an IRS computational or processing error in assessing the amount of tax due from you
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The audit reconsideration process: how to request IRS audit reconsideration
A request for reconsideration must be diligently prepared to ensure its acceptance by the Internal Revenue Service.
1. Review audit report and gather documents
The IRS sends you an original audit report that details how it has made the assessments. Review it carefully to find out which items you'd like the department to reconsider. This will also enable you to gather the appropriate documentation to support your request.
Remember, the supporting documentation that you provide must be new information that hasn't been examined before. It must be for the tax year in question. If you're already paid the amount due in full, you'll need to file a formal claim using Form 1040X instead of a request for reconsideration.
2. Submit your documents to the IRS
All relevant documents need to be submitted to the IRS. This will include a copy of your audit report and copies of all documents that you're relying on to support your request. This may include Forms 1099, bank statements, loan documents, etc.
Copies of all documents that were previously provided to the IRS should also be included. You must also include a letter that highlights your reasons for seeking reconsideration. This can either be through IRS Form 12661 or a simple letter.
3. Attach IRS form 12661
The IRS audit reconsideration form 12661 is the official letter that taxpayers can fill out to request a reconsideration. You can also write a simple letter to the IRS instead of using this form. The next section provides directions on how to write this letter.
If using IRS form 12661, fill out the sections to provide information relevant to your request. The form has sections for highlighting the disputed assessments and providing the reasons why you disagree with them.
4. Attach audit reconsideration form 4549
IRS Form 4549, also known as the Income Tax Examination Changes letter, provides a summary of the changes proposed by the department for your tax return in addition to any penalties and interest determined as a result of the audit.
You'll need to provide a copy of IRS form 4549 with your request for reconsideration. It will substantiate the disputes that you’ve raised.
How do I write an audit reconsideration letter?
It's not necessary to use Form 12661 as your request for reconsideration can also be made through a simple letter addressed to the IRS. If you opt to write a letter instead, ensure that it provides all of the relevant information to support your case.
At the very least, this letter should highlight the reasons why you're asking for a reconsideration, the assessments that you're disputing, and provide an overview of the new information that you're relying on.
Most taxpayers who decide to take this route try to find an audit reconsideration letter template that they can adapt as they’re often unsure about how the letter needs to be structured. We’ve created a free sample for you that’s easy to understand.
IRS Audit reconsideration letter sample
We have created this IRS audit reconsideration letter template to help taxpayers looking to dispute audits hit the ground running. However, it’s important to understand that every audit case is unique. There’s no one-size-fits-all solution here.
The reconsideration letter that you send must properly address the specifics of your case and present all information in a manner that helps the department reach a favorable decision in your case. Obtaining professional assistance in drafting the letter could make all the difference.
Need help drafting an audit reconsideration template?
Remember, you have one shot at audit reconsideration so everything needs to go without a hitch. Even though the process of filing for reconsideration may seem simple enough, there are many technicalities in which to be mindful. The best way to avoid these difficulties is to seek the professional assistance of an IRS audit attorney.
At Brotman Law, we are qualified tax professionals that can help you avoid the pitfalls and guide you through the entire audit reconsideration process. Contact us today for IRS tax representation and we’ll connect you to an experienced tax attorney that can solve your tax issues.
How long does audit reconsideration take?
Once you've sent in your request, expect to hear back from the IRS within 30 days but it often happens that the department takes much longer to respond. It may take up to several months before you get a response.
If you'd like to expedite your request, write to the Taxpayer Advocate's Office and request them to expedite your case. You'll need to fill out Form 911 titled Request for Taxpayer Advocate Assistance.
If the IRS decides to reject your request or you don't respond to a request for additional information within 30 days, the collection activity may resume after the final determination.
If it accepts your request, the additional tax that has been assessed will be removed. The IRS may also decide to partially reduce (abate) the tax debt.
If you disagree with the results of the reconsideration, you can request an Appeals Conference at the appeals office, pay the amount due in full and then file a formal claim or simply do nothing. In that case, the IRS will send you a bill for the amount due.
Where to send IRS audit reconsideration requests
The examination report that you receive from the IRS office will include an address where you need to send all of the further information for your reconsideration request. If it doesn't mention an address, you can locate your region's office through the IRS website.
Regional Internal Revenue Service campuses are located in Andover, Atlanta, Austin, Cincinnati, Fresno, Holtsville, Kansas City, Memphis, Ogden, and Philadelphia.
Other IRS.gov audit reconsideration contact information
There isn't a direct IRS reconsideration department number that you can dial to speak to someone about your case. However, you can call 1-877-777-4778 toll-free phone number to speak to your local Taxpayer Advocate if you face a significant hardship due to a tax problem.
Similarly, there's no single IRS reconsideration department fax number that you can fax your documents. You'll need to send the documents to the specific IRS campus shown on your examination report and it should include the correct phone and fax numbers.
What percentage of IRS audits are appealed?
For the vast majority of taxpayers, the chances of getting audited by the IRS is less than 1%. Those making $25,000 - $50,000 a year have a 0.4% chance of being audited. Only a small percentage of those IRS audits are appealed by the taxpayers affected.
If successful, how long does it take to get your refund after an audit?
Tax laws do not provide a specific timeframe for refunds to be processed. Even if your return was audited, there's a good chance that you'll still get your refund as long as there are no issues with the return. It normally takes between 4-8 weeks to get your refund.