Real Solutions to IRS Debt and Related Problems

IRS Audit & Appeal FAQ

Q: How Far Back Can the IRS Audit a Return?

A: 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.

Q: What if I Don't Respond to An IRS Audit?

A: 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.

Q: Do I Have to Pay the New Audit-Related Debt as Soon as I Get the Bill?

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

Q: What if I Just Missed the Entire Audit Process?

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

Q: Can the IRS Contact Third Parties when Auditing Me?

A: 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.

Q: How Likely Am I to "Win" My Audit?

A: 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.

Q: Can IRS Appeals Request a Statute of Limitation Extension?

A: 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.

Q: How Likely Is It that I'll Be Audited?

A: 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.

Q: What Are Considered Some Audit "Red Flags"?

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

Q: Can Someone "Turn Me In" for IRS Audit?

A: 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.

Q: If I've Been Assigned a Field Auditor, What Should I Be Aware Of?

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

Q: Can I Take Care of An IRS Mail Audit by Faxing Information?

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

Q: Can I File an IRS Tax Court Petition on My Own?

A: 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.

Q: How Do I Appeal a Bad Audit Result?

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