IRS Audit & Appeal FAQ
How Far Back Can the IRS Audit a Return?
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.
What if I Don't Respond to An IRS 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.
Do I Have to Pay the New Audit-Related Debt as Soon as I Get the Bill?
No. The new debt related to the audit must go through the IRS collection notice process in order to be considered “collectible” debt.
What if I Just Missed the Entire Audit Process?
Rules provide for you to ask the IRS to “reconsider” the results of the audit you didn't participate in.
Can the IRS Contact Third Parties when Auditing Me?
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.
How Likely Am I to "Win" My Audit?
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.
Can IRS Appeals Request a Statute of Limitation Extension?
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.
How Likely Is It that I'll Be Audited?
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.
What Are Considered Some Audit "Red Flags"?
There are certain types of returns and items in returns that are considered to be more likely to cause an audit.
Can Someone "Turn Me In" for IRS 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.
If I've Been Assigned a Field Auditor, What Should I Be Aware Of?
In-person audits are typically more complex and serious. There are some items you should be aware of.
Can I Take Care of An IRS Mail Audit by Faxing Information?
Yes. In fact, it's probably a preferred method if deadlines are near and you should follow up to ensure the fax was received.
Can I File an IRS Tax Court Petition on My Own?
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.
How Do I Appeal a Bad Audit Result?
An audit result can be appealed internally and to the U.S. tax court.