IRS Audit & Appeal FAQ

As a general rule, the IRS can audit a return and assess additional tax up to 3 years after the return due date of the return filing date, whichever is later. There are exceptions to this general rule that provides the IRS more time to audit.

If you don't respond to the audit, the IRS will eventually create a debt or a new debt amount with penalty and interest, and then move the debt to the collection enforcement side.

No. The new debt related to the audit must go through the IRS collection notice process in order to be considered “collectible” debt.

Rules provide for you to ask the IRS to “reconsider” the results of the audit you didn't participate in.

Yes. The IRS can contact banks, business partners, and others. The IRS should provide you notice beforehand so that you can just provide the info or challenge the proposed contact.

Provable facts and law matter. The taxpayer needs to be able to prove the income/expenses on the return are real and that they are nontaxable/deductible under the law.

Yes. The IRS only has a specific period to finalize an audit. If you appeal the decision, appeals may ask you to extend that date.

Overall audit odds have been low in recent years. But there are certain entities and items on tax returns that increase the odds of audit.

There are certain types of returns and items in returns that are considered to be more likely to cause an audit.

Yes. The IRS accepts “ whistle-blower” information. The whistle-blower will submit a form to the IRS called in the information referral form. The IRS encourages it.

In-person audits are typically more complex and serious. There are some items you should be aware of.

Yes. In fact, it's probably a preferred method if deadlines are near and you should follow up to ensure the fax was received.

Many taxpayers file a petition with the U.S. tax court post audit on their own. the tax court web-page provides some detailed information about the process.

An audit result can be appealed internally and to the U.S. tax court.