What To Do After You Receive An Audit Letter

If you have received a letter from the Internal Revenue Service (IRS) about a civil audit, you are not alone. You may be feeling overwhelmed and not sure where to start. Understanding the steps you need to take, and the timeline of an audit can help reduce anxiety and help your audit go more smoothly.

The Internal Revenue Service (IRS), in the fiscal year 2021, closed 738,959 tax return exams. IF you receive an auditing letter this year, your audit will not be concluded in the next two years, depending on the issues that arise.

The Internal Revenue Service (IRS) does not use telephone or email to notify taxpayers of an audit. There has been an increase in spam activity, so you must know how the IRS will contact you about audits. The IRS will only send you alerts through the U.S. Postal Service. Other lines of communication from the “IRS” are scams and should not be taken seriously. You should never give personal information to these scams on the phone or through email.

There is a look-back period for an audit; generally, this is three years but can be six years in some circumstances. Usually, the Internal Revenue Service (IRS) initiates and audits relatively quickly after a text return is filed. The Internal Revenue Services (IRS) typically concludes an audit about 27 months after the tax return is filled with no extenuating events, facts, evidence, or a tax crime. There are highly complex cases that can take years to complete.

There are two types of audits, correspondence audit and field audit. Both of these audits will be initiated by mail. Speaking with an attorney accustomed to working with the Internal Revenue Service (IRS) can help you resolve the audit with less stress and anxiety.

Correspondence audits are completed by mail. A correspondence audit usually takes less time than field audits but can take longer if additional requests and documents go back and forth in the mail. You will receive a letter outlining the additional documents needed during a correspondence audit. You will then send the requested items back in the mail to the Internal Revenue Service. In 2021 the Internal Revenue Service conducted almost 79 percent of its audits by mail.

Field Audits occur in a regional office of the IRS or at the home or business of the taxpayer. Field outs are often more complex and will take longer than correspondence audits. It is not uncommon for a field out to take longer than a year. Examiners conduct field audits with varying levels of training based on the issues and business circumstances.

Responding to any audit should be done with caution and truthfully. You have the right to representation during an in-person Internal Revenue Service interview. When a complex issues or issues that border on tax fraud, you should work with an experienced IRS tax attorney to help you ensure that your response is clear to the examiner.

When you receive an audit letter, speak with a tax attorney familiar with working with the Internal Revenue Service if you have a complicated or question return. Working with an attorney can reduce your tax liability during this audit.