Going through an audit is bad enough as is, but what happens if at the end of the process you think the IRS is wrong about how much you owe? Helpfully, a process exists to ask for reconsideration. You must carefully follow the correct steps to ask the IRS to take a fresh look at your situation.
Eligibility to Ask for Reconsideration
When you receive your examination report, Form 4549, you should look through it carefully to find out what you disagree with. Don’t immediately pay the full amount due, otherwise, you won’t be able to ask for reconsideration.
The IRS allows you to request reconsideration in the following situations:
- You didn’t appear for your audit. For example, you might never have received a notice, or you might just have been too scared to show up.
- You have additional information you want the IRS to consider that you didn’t present during your original audit.
- You disagree with the audit’s assessment. For example, you don’t think you owe as much as the IRS claims.
Asking for Reconsideration
Locate any supporting documents and make photocopies to submit to the IRS. You don’t want to submit originals since the IRS won’t return them. You must also write a letter asking for reconsideration and clearly identifying what changes you want the agency to consider. The IRS has published a form you can use, Form 12661, Disputed Issue Verification.
Remember to attach photocopies of your supporting documents as well as your examination report to your letter. This will speed up the reconsideration process considerably. You may submit your documents through the mail or by fax.
Waiting for a Response
Once it receives your request, the IRS might halt any collection activity until it has made a decision on the reconsideration request. However, it can also start up collection activity if you don’t respond to its requests, so it is important to provide any requested information or documents as soon as possible. Based on its review, the IRS might take one of three actions:
- It will accept your information and abate the disputed taxes.
- It will accept some of your information and reduce the amount owed.
- It will not reduce or eliminate the disputed amounts because your information does not support your claim.
People on installment agreements must continue to make payments while awaiting the IRS decision. If you agree with the IRS decision, you can pay in full. If you don’t, then you should consider next steps, such as requesting an Appeals Conference or paying the amount and then filing a formal claim.
Contact an Atlanta IRS Tax Lawyer
Reconsideration is just one step in disputing an IRS audit. At each step of the way, you’ll benefit from the advice of an experienced IRS tax lawyer. Jeff Cohen, Attorney at Law, has over three decades of experience representing taxpayers before the IRS and is available to help. Contact him today for a free teleconsultation at 404-937-1414 or complete an online contact form. Also serving Marietta.