Understanding the IRS Substitute for Return
Click to ask Mike Ask Mike The Internal Revenue Service (IRS) Substitute for Return (SFR) is a term many taxpayers
Audit Reconsideration
Disagreeing with the results of an Internal Revenue Service (IRS) audit can be a challenging and stressful experience. However, the IRS provides a process called Audit Reconsideration that allows taxpayers to contest the findings and potentially reduce their tax liability. This comprehensive guide will take you through the entire process, providing detailed information on when and how to apply, the specific form to use, and essential tips for a successful reconsideration request.
Steps you need to know:
Understanding Audit Reconsideration: Audit Reconsideration is a provision authorized by Internal Revenue Code 6020(b), offering taxpayers the opportunity to challenge IRS assessments resulting from audits or tax returns filed on their behalf. The process is crucial for individuals who disagree with the results of a prior audit or find themselves in a situation where the IRS filed a return on their behalf without their input.
Eligibility Criteria for Audit Reconsideration
: To qualify for an audit reconsideration, taxpayers must meet specific criteria:
- Disagree with the results of a prior audit.
- Did not appear for the IRS audit.
- Moved and did not receive correspondence from the IRS.
- Possess additional information not presented during the original audit.
- Disagree with the assessment from the audit.
Importance of New and Compelling Information: Central to a successful Audit Reconsideration request is the presentation of new and compelling information that the IRS did not previously consider. This information may include documentation, records, or details challenging the accuracy of the initial assessment.
Initiating the Audit Reconsideration Process:
Eligibility Check and Form Identification: Before proceeding, ensure eligibility by confirming that you meet the criteria mentioned earlier. While there isn’t a specific form designated for Audit Reconsideration, Form 12661 is commonly used as the written request to initiate the process.
Filling Out Form 12661: A Step-by-Step Guide
:
Click Here for more details.
Additional Documentation: Attach photocopies of supporting documents, such as Form 1099, canceled checks, bank statements, loan documents, and IRS Form 4549. Avoid sending original documents.
Submitting the Form: Mail the completed Form 12661 along with supporting documentation to the IRS office that made the adjustment. Refer to IRS Publication 3598 for the appropriate address. Maintain proof of mailing for record-keeping.
Tips for a Successful Request:
Be Clear and Concise: Articulate the disagreement with audit findings clearly and concisely. Allocation of additional tax between you and your spouse for items incorrectly reported on the joint return.
Include All Relevant Details: Complete each section of Form 12661 with accurate and relevant information. Be thorough in explaining new evidence.
Supporting Documentation: Provide copies of all necessary documents supporting the claim. Include bank statements, receipts, or any relevant records.
Use Additional Sheets if Needed: Attach extra sheets if the space on Form 12661 is insufficient to explain the case in detail.
Maintain Proof of Mailing: Keep a record of when and where you mailed the Audit Reconsideration Request for documentation purposes.
What to Expect After Submission: Upon submission, the IRS will review the provided information. This process can take anywhere from a few weeks to several months, influenced by department workload and potential processing delays. Delays may be longer than usual.
What to Expect After Submission: Upon submission, the IRS will review the provided information. This process can take anywhere from a few weeks to several months, influenced by department workload and potential processing delays. Delays may be longer than usual.
The Complexity of the Audit Reconsideration Process: Navigating the Audit Reconsideration process involves careful attention to detail and patience. The IRS will assign the case to an auditor, usually the same one who worked on the original audit. The auditor may request additional information through an Information Document Request (IDR). If they agree with your position, they may reduce or abate the tax based on the new evidence. However, if they disagree, they will send a letter explaining their decision.
Time Frame for Resolution: The timeline for completing an Audit Reconsideration can vary widely. While some cases may be resolved within a few weeks, others can take several months or even up to a year, especially for older tax years. Delays may occur due to the complexity of the issues involved and processing backlogs.
Appeals and Next Steps: If you disagree with the results of the Audit Reconsideration, you have the option to appeal your case to the IRS Appeals office. This can involve requesting a conference to present your arguments. If the appeal is denied, you may further escalate the matter by filing a formal claim for a refund in U.S. district court or the Court of Federal Claims. It’s essential to consider seeking legal representation for these stages.
Form 8379: Download this form -Click Here
Form 4549: Download this form -Click Here
Important Tip: Before submitting an application for any of the IRS's tax programs, you should make sure that you are in complete compliance and carefully - review this information. Click Here
Important Tip: Successfully navigating the Audit Reconsideration process requires diligence, accuracy, and a well-prepared request. By following this step-by-step guide, you enhance your chances of a favorable outcome. Remember to exercise patience throughout the process, and in case of significant delays, consider reaching out to the Taxpayer Advocate Service for assistance. Resolving tax discrepancies is a meticulous process, and a comprehensive Audit Reconsideration Request is a vital step toward achieving a fair resolution with the IRS.
Resource Links:
Audits by Mail –
What to Do? Click Here
Conclusion: This article provides a overview of the Audit Reconsideration process, offering insights into eligibility, form completion, and tips for a successful outcome. Applying for Audit Reconsideration requires careful attention to detail, and this guide aims to empower taxpayers in navigating this intricate aspect of tax resolution. While an audit Reconsideration can be a viable strategy to lower your tax debt, seeking professional guidance, particularly from a Tax attorney, enrolled agent, or CPA, is strongly recommended because of the complexity of an audit. We advise you to consult with a tax attorney, enrolled agent or CPA. It’s a smart move, but like any important decision, if you’re unsure, consider asking a professional for guidance to ensure you’re making the best choices for your unique situation.
We only serve as a resource website and do not offer personalized tax assistance.
We only serve as a resource website and do not offer personalized tax assistance.
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Click to ask Mike Ask Mike The Internal Revenue Service (IRS) Substitute for Return (SFR) is a term many taxpayers
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Disclaimer: This is educational content, not legal, accounting, or tax advice.Â
