Challenging The IRS Audit

The IRS has audited you and the report is now complete. Take your time, read through the report carefully and if you don’t understand it, contact your auditor. Now that you understand it, you may not agree with it. If you don’t agree with, there are some actions that you can take to appeal the IRS’ decision. First, send a protest letter to the IRS within 30 days of the receipt of the IRS Audit report. While you can use standard first class mail, I would recommend sending this certified so that you have proof that they received it, The certified letter should require a signature, avoiding later concerns that your letter for an appeals hearing is being requested too late. Once you request an appeals hearing, one will be granted with an appeals officer supposedly unbiased and from a different division of the IRS. This officer is not a part of the office that originally conducted your IRS audit.

If you meet with the officer, and still do not agree with the outcome, other steps can be taken to have your side heard. You can file a petition in tax court, which is fairly inexpensive and not that difficult. You can find helpful resources online that can aid you during this process. While you can file a petition on your own, it is only suggested to act on your own behalf if your tax bill is less than $50,000. Any amount over that and it would be worth your investment to seek the advice of a tax attorney.

As a rule, contesting your audit in court is beneficial. If you are being unjustly charged your case can be heard but beyond that you may save money simply by appealing the decision. About half of the people who file a petition in tax court end up paying a reduced penalty. While there is no guarantees, it is at least worth a shot. Reducing your tax bill, filled with fees and penalties, by only 10% can add up to significant savings. Weigh your options, the amount of time that your case will take and determine if tax court in the right decision. If tax court fails, I am sorry to report, that there is little you can do other than seek advice from a tax advisor and/or attorney. At this point you have exhausted your last method, tax court, so there may not be anything either of those professionals could do either. Good Luck!