Audits by Mail

If the IRS selected your return for audit (also called examination), it doesn’t automatically mean something is wrong. Once the IRS completes the examination, it may accept your return as filed or propose changes. These changes may affect the amount of tax you owe (a proposed deficiency) or the amount of your refund.

The IRS conducts audits in two ways – by mail, or in person. This topic deals with an audit by mail – where the IRS sends you a letter explaining your tax return has been selected for examination and identifying the items under review. The letter will outline:

• What documentation you need to provide;
• Where to send it; and
• Who to contact with questions.

Download the full IRS Publication 3498-A, The Examination Process (Examinations by Mail)

Read the letter and follow the instructions.

Compare the IRS’s proposed changes in the letter to your tax return to make sure you and the IRS are starting from the same point, with the same figures (numbers on your tax return). Review the letter and any attachments to find out what information you need to gather.

If there’s a difference between any paperwork you have and what the IRS is asking for, ask the employee whose name is on your notice.

Submit all documentation requested by the due date to the address in the letter.

• Don’t send original documents – send copies.
• If you fax the information, include your name and Social Security number on each page. This will help the IRS associate all your documents with your file.

If you don’t understand what to provide, you have options:

• Call the number on your letter;
• Write to the IRS at the address shown on the letter;
• Make an appointment to visit your local IRS Taxpayer Assistance Center; or
• Obtain professional assistance (from an attorney, certified public accountant, or tax professional). You can also see if you qualify for assistance from a Low Income Taxpayer Clinic.

Once the IRS completes the initial review, it will:

• Accept your original tax return as filed;
• Ask you to send more information; or
• Propose changes to your return.

For more information about what happens next, see the How will this affect me? section (below).

If the IRS accepts your tax return as originally filed, you’re done. If the IRS proposes changes, a few things can happen.

If the IRS doesn’t accept the documentation for your tax return, you’ll get a letter explaining any proposed changes.

Contact the IRS at the number shown on the letter, if you don’t understand the changes. If you do understand them, decide if you agree or disagree with some or all the changes.

If you agree with all the proposed changes:

• Sign the agreement page of the letter and return it to the IRS.
  • If you owe any additional tax, penalties, and interest, you should pay it as soon as possible, so the IRS won’t charge you any more interest. If you can’t afford to pay the complete amount, consider other payment plans, or contact the IRS to discuss options.
  • If the proposed changes result in a refund, you can generally expect to receive it in six to eight weeks (provided you have no other unpaid tax debt or other debts the IRS collects such as past due child support or student loans).

If you don’t agree with some or all the proposed changes:

• Don’t sign the agreement.
  • Respond to the IRS by the due date on the letter. This could include sending additional documentation or an explanation to support your position.
  • If you need more time to submit your response, call the number on the letter before the due date to ask for additional time.

If the IRS’s examiner still proposes a change to your return, you can:

• • Request an informal conference with the examiner’s manager prior to the response date in the letter.
  • Request a conference with the IRS Office of Appeals prior to the date in the letter. Make this request in writing. Include your reasons for disagreeing with the IRS.

If you don’t respond by the due dates in the letter, the IRS may disallow what you claimed on your return and issue a Statutory Notice of Deficiency. This is a legal notice the IRS is proposing an additional deficiency (balance due). It gives you 90 days to petition the United States Tax Court (Tax Court) for review of your case. If your address is outside the United States, you have 150 days.

Once you’ve petitioned the Tax Court, if you haven’t already had a conference with the Office of Appeals, the IRS Office of Chief Counsel may forward your case to Appeals for a conference.

Both the Office of Appeals and the United States Tax Court are generally “prepayment forums” which means that you can dispute the proposed adjustment before the IRS assesses it.

The 90-day (or 150-day) deadline to file a petition in Tax Court can’t be extended. If you miss the deadline, you won’t be able to have a judge review your case without first paying the amount due. The 90 or 150 days doesn’t include as the last day a Saturday, a Sunday, or a legal holiday in the District of Columbia.

There are fees to petition to the Tax Court. If you can’t afford to pay the filing fees, you can ask for a waiver.

The Taxpayer Advocate Service is an independent organization within the IRS that helps taxpayers and protects taxpayers’ rights. We can offer you help if your tax problem is causing a financial difficulty, you’ve tried and been unable to resolve your issue with the IRS, or you believe an IRS system, process, or procedure just isn’t working as it should. If you qualify for our assistance, which is always free, we will do everything possible to help you.

Visit www.taxpayeradvocate.irs.gov or call 1-877-777-4778.

Low Income Taxpayer Clinics (LITCs) are independent from the IRS and TAS. LITCs represent individuals whose income is below a certain level and who need to resolve tax problems with the IRS. LITCs can represent taxpayers in audits, appeals, and tax collection disputes before the IRS and in court. In addition, LITCs can provide information about taxpayer rights and responsibilities in different languages for individuals who speak English as a second language. Services are offered for free or a small fee. For more information or to find an LITC near you, see the LITC page on the TAS website or Publication 4134, Low Income Taxpayer Clinic List.

• Low-Income Taxpayers Encounter Communication Barriers That Hinder Correspondence
• EITC Audits Will Once Again Begin; Proactively Responding to an EITC Audit
• Are IRS Correspondence Audits Really Less Burdensome for Taxpayers? 
• I Got a Notice from the IRS 
• Audits in Person 
• Audit Reconsiderations