In some circumstances, the IRS makes mistakes. It may record a tax liability as being owed that is in excess of the amount of tax that is actually owed. This may happen if an audit is closed prematurely or if the IRS makes adjustments to tax accounts without having the records or facts necessary to make the correct determination.
The IRS has the ability to reduce taxes that are assessed in excess of the amount of tax that is actually owed in these cases. The IRS can make these corrections when the taxpayer files an amended tax return; however, an amended return is usually not sufficient to change the results of an IRS audit.
What is an audit reconsideration request?
The audit reconsideration request refers to the process for making these corrections after the time period for filing an amended tax return has expired (technically, it can be used prior to this time too).
The IRS has a special unit for handling these requests. These requests are not easy to get approved, but if they are, the tax liability and any penalties and interest computed based on the tax liability will also be recomputed retroactively.
We can help you with this. We advise clients on amended tax return and audit reconsideration issues daily.
If the IRS has made changes to your tax account and the tax liability is in excess of the correct amount owed, contact us for information on how to solve this problem.
Why you may want to pursue an audit reconsideration.
If you are going to file an amended tax return, know that you may have a limited time. Also know that the IRS is likely to reject an amended tax return that reverses an IRS audit. The reason why it is likely to do this is that the amended tax return does not provide sufficient detail to apprise the IRS as to the missing records or facts needed to make a correct determination.
Here are some potential situations where you may want to pursue an audit reconsideration:
- You are or were missing documentation during the course of the audit
- The IRS missed some information that you sent in response to its inquiries
- You are in disagreement with an earlier assessment and you have more information to further that claim
The IRS will be more likely to grant your request for if:
- You provide new information that wasn’t previously available and if had been included would have meant that the assessment would be different
- An IRS error is identified
- In certain other circumstances where a late tax return was filed post-assessment
There are some reasons why the IRS will not consider an audit reconsideration. These include:
- If you have already executed a written agreement saying you will pay a specific amount, either through a closing agreement or offer in compromise, or
- If a federal court has already determined that you are liable for the tax.
What you need before submitting your audit reconsideration.
Before submitting an audit reconsideration, you will need to:
- Find tax return for the year in question
- Submit a copy of the audit report
- Ensure that the changes you are requesting are clearly defined and explained
- Develop a letter clarifying the facts and law and setting out your position(s)
Your situation and legal argument must be presented with evidence.
You should also be aware that collection activity will likely be delayed through this process, even though this is not legally required.
Take action to correct incorrect tax accounts now.
We are former IRS attorneys, appeals officers, and auditors who help taxpayers with audit reconsideration requests. We offer compassionate, individualized service at the most affordable rates.
Call today for a free, confidential consultation. Our number is 713-909-4906.