Tax Law

IRS Audit Reconsideration

IRS Audit Reconsideration

There are few things that are more anxiety-inducing than getting an audit letter from the Internal Revenue Service (IRS). An audit can be incredibly scary, particularly if the IRS determines that you owe the government money. Fortunately, there is a way to challenge the IRS’ findings by requesting an IRS audit reconsideration.

Through an audit reconsideration, taxpayers can examine the results of an audit where an additional tax was assessed or a tax credit was reversed. Requesting an audit reconsideration gives you an opportunity to present your case to the IRS. If you meet the criteria for reconsideration, you will be able to submit evidence and an explanation as to why you believe that the IRS audit results were incorrect.

At Poole Brooke Plumlee PC, we represent both individuals and businesses involved in tax disputes with the IRS and the Commonwealth of Virginia. With more than 20 years of experience in federal and state tax law, we have the knowledge and skill to help you achieve a favorable resolution for your claim. Reach out today to schedule a confidential consultation with a Virginia tax lawyer.

Can I Request an IRS Audit Reconsideration?

You can request an audit reconsideration for a number of reasons, including failing to appear for your audit, having additional information to present to the IRS, or simply disagreeing with the audit assessment. However, the IRS will generally not accept your request unless:

  • You submit information that was not considered during the audit process;
  • You filed a tax return after the IRS completed a return on your behalf;
  • You believe that the IRS made a computing or processing error in the audit; and/or
  • The tax liability is unpaid or credits are denied.

If you have already paid your tax debt in full, then you cannot submit a request for reconsideration. Instead, you must file a formal claim using Form 1040X, Amended U.S. Individual Income Tax Return. When you file the 1040X, you will then be able to request a refund.

There are several other situations where you cannot request an audit reconsideration, including:

  • You already agreed to pay the amount owed under a Form 906, Closing Agreement, a Compromise agreement, or an agreement with the Appeals Office.
  • The U.S. Tax Court, or another court, has made a final determination as to how much you owe in taxes.
  • The tax debt is the result of final partnership item adjustments pursuant to the Tax Equity Fiscal Responsibility Act.

Because the potential consequences of a tax audit can be quite steep, it is vital to consult with a Virginia tax audit attorney as soon as possible after receiving an audit letter. Your lawyer can explain the process to you, represent you throughout the audit, and file an appeal or request for reconsideration if necessary. If you did not hire legal representation for your audit, you can still work with a lawyer to request reconsideration after you receive the results of the audit.

How to Request an IRS Audit Reconsideration

We recommend that you consult with a Virginia tax attorney prior to submitting any documentation to the IRS.  After you receive the audit report, the first thing that you should do is carefully review both the report and any attachments to determine if the IRS made any errors. Once you have identified the areas that you believe are incorrect, you will need to gather documentation to support your arguments, such as invoices, receipts, and canceled checks. This documentation must be for the tax year in question, and must not have been submitted to the IRS previously.

With your evidence in hand, your attorney will then draft a letter to the IRS explaining why you are requesting reconsideration. Although it is not required, a Form 12661, Disputed Issue Verification, can be submitted to explain the parts of the audit that you dispute. This letter should be mailed to the last IRS office that you corresponded with, along with a copy of your audit examination report and any new documentation that supports your request for reconsideration. 

Be sure to include contact information with this letter. Do not send original documents, as the IRS will not return them to you. If you fail to submit any new proof for the IRS to review, then the IRS will not reconsider your case.

An IRS audit reconsideration can be requested at any time after an examination assessment has been made, provided that the tax remains unpaid. As a general rule, the IRS will respond to requests for reconsideration within 30 days of receiving your letter. They may respond by:

  • Accepting the new information and removing the previously-assessed tax;
  • Accepting some of the new documentation and reducing the previously-assessed tax in part; or
  • Determining that the new information did not support your argument and allowing the original assessment to stand.

The response from the IRS will typically include an explanation of why your request was accepted or denied in full or in part. The examiner will list the documentation that you submitted, along with an explanation as to whether it was acceptable. 

If you accept the results of the reconsideration, then you can either pay your tax debt (if any)  in full or make other arrangements if you qualify. However, if you disagree with the IRS’ decision regarding your audit reconsideration, then you can escalate your tax dispute by requesting a meeting with the IRS Office of Appeals. 

If you were not already represented by counsel, you are strongly encouraged to consult with a Virginia tax lawyer at this stage of the process. An attorney can advise you of your options for pursuing a tax dispute with the IRS and explain the odds of success based on the facts of your case. If you choose to request a meeting with the Office of Appeals, your lawyer can represent you at the hearing and put together a strong argument as to why the audit examination was incorrect.

Dealing with IRS Audit Issues? Call Our Law Office Today.

IRS audits are serious business. If the agency determines that you submitted an inaccurate tax return, failed to file a return, or committed fraud, you could be assessed significant civil penalties or even charged with a crime. For this reason, it is vital to consult with a seasoned tax attorney as soon as possible after you receive notice that you are being audited.

At Poole Brooke Plumlee PC, our team of tax lawyers have substantial experience handling tax disputes at all levels. We represent individuals and businesses in tax audits and in any ensuing appeal of an IRS audit determination. To learn more or to request a consultation with a skilled tax audit attorney, call our law firm at 757-499-1841 or fill out our online contact form.

Stay in Touch with Our Firm