Did you receive a notice from the IRS (Internal Revenue Service) that doesn’t feel right? You don’t have to walk away from audits feeling confused, frustrated, or unfairly penalized if you believe the IRS missed key information, made an error or overlooked certain evidence during the original audit. You can apply for audit reconsideration if you didn’t agree to the audit, if you moved and missed IRS notices, or if you now have new information that wasn’t included the first time. If you do it right, audit reconsideration can potentially reduce what you owe or even eliminate it entirely.
Victory Tax Lawyers is your go to for any IRS-related challenge. If your audit is complex or you’re unsure where to start, the tax attorneys at Victory Tax Lawyers can help you through the process. Our team of trained lawyers are equal to the task and have handled a myriad of tax-related matters successfully. You can get a free consultation today and explore our tax-relief services.
In this post, we’ll explain how IRS audit reconsideration works, who’s eligible, and the step-by-step process for submitting a request. We’ll also share practical tips for strengthening your case, avoiding common mistakes, and knowing when to seek professional help.
What Is an IRS Audit Reconsideration?
An IRS audit reconsideration is a process that allows you to request a reevaluation of the results of an IRS audit. It gives you a second chance to challenge the results of a completed audit if you believe the IRS made a mistake in the audit report.
An audit reconsideration is not the same as appealing an audit. It is challenging the outcome of an audit while providing new information that was not available at the time of the audit process. On the other hand, an appeal is a formal procedure where you challenge the audit’s findings through the IRS (Internal Revenue Service) Office of Appeals. Appeals usually involve legal arguments and may lead to court proceedings in the United States Tax Court.
Why Should You Consider IRS Audit Reconsideration?
An IRS audit reconsideration can correct any error in your audit and lead to an adjustment in your tax liability. The following scenarios should warrant you to request an IRS audit consideration:
- Discovery of new evidence or documentation: If after an audit concludes, you find new information that wasn’t available during the initial review, you should provide the new evidence for the IRS to reassess and possibly amend their previous findings. This new evidence could include overlooked receipts, financial records, or other pertinent documents that support your tax return’s accuracy.
- Incorrect audit findings due to missing or misunderstood information: Certain facts can be misunderstood or not considered in the audit process, leading to errors in the IRS’s conclusions. You can simply provide clarifying information to rectify these inaccuracies.
- The taxpayer was unaware of the audit and did not respond: A deficiency assessment can happen without your input if you were not aware of the ongoing audit, probably because you didn’t receive an IRS correspondence. In such a case, you can present your case via an audit reconsideration.
- Errors in IRS calculations or misapplication of tax laws: The IRS, like any institution, can make computational or processing errors or misapply tax regulations. If you identify such mistakes in your audit results, bringing them to the IRS’s attention through reconsideration can lead to necessary corrections.
Who Qualifies for an Audit Reconsideration?
It takes meeting specific criteria to become eligible to request reconsideration. You may qualify for IRS audit reconsideration if:
- You didn’t appear for your income tax examination.
- You moved and didn’t receive IRS correspondence.
- You have new information or documents that weren’t submitted during the original audit.
- You don’t agree with the IRS’s assessment of your tax liability.
Bear in mind, the IRS is not obligated to grant your audit reconsideration request. Even after providing and submitting new information, it’s still up to their discretion. This doesn’t mean you can remain passive. You’ll need to actively submit documents that support your case—such as receipts, account statements, or proof that you qualified for certain deductions or tax credits. The more evidence you provide, the better your chances are of having your audit reconsideration accepted and your tax liability lowered.
How to Request an IRS Audit Reconsideration
Although the IRS audit reconsideration process can seem complicated, understanding the steps can help make the situation more manageable.
1. Review the Audit Findings
Thoroughly review the examination report the IRS sent you before you send audit reconsideration requests. This report will explain how the IRS made its assessments and will highlight any discrepancies between your tax return and their findings.
Read through the report line by line. Compare what you reported on your tax return with what the IRS determined. Check the reasons they provided for any adjustments they made. By doing this, you can easily pinpoint the specific areas you want to challenge.
2. Contact a Tax Lawyer
You can contact an experienced lawyer to help you navigate the whole process. They provide expert advice on whether your case qualifies for reconsideration. They also let you in on the legal implications of your audit and see to it that you fully understand your rights and options. A professional will also help make sure that your reconsideration request meets all IRS requirements.
A tax lawyer at Victory Tax Lawyers can offer valuable guidance to increase your chances of success. You can get a free consultation with us today.
3. Collect New Evidence or Documents
The IRS will only reconsider your case if you provide new information that wasn’t reviewed during the original audit. Provide updated financial records such as revised tax returns, receipts, or bank statements that support your claim. If you previously missed a deduction or incorrectly reported income, include the corrected information. Invoices, contracts, or proof of payment that directly support your position can also be helpful. Make sure everything you submit directly relates to the tax year in question and hasn’t already been reviewed.
4. Submit the Request for Reconsideration
After you’ve gathered new evidence and reviewed your audit findings, submit your IRS audit reconsideration request, along with a copy of the original examination report. There isn’t a formal deadline, but it’s in your best interest to act quickly.
Write a letter to the IRS that clearly explains your claim. Refer to specific items in the audit, present your new evidence, and explain why the audit results should be changed. Include your name, address, taxpayer identification number (Social Security number or ITIN), and the tax year under review. Make copies of the notice you’re responding to, your documents, and the letter itself. Never send originals.
You can submit your reconsideration package by mail or fax. If mailing, use certified mail with a return receipt so you have proof of delivery. If faxing, include your identifying information (like your SSN or ITIN) on every page.
After sending your reconsideration request, call the IRS Collections Division and notify them that you’ve submitted an audit reconsideration request. Ask them to place a temporary hold on collection activity while your request is under review. This isn’t guaranteed, but it can buy you some time. If a hold isn’t granted, you may be able to request a Collection Due Process (CDP) hearing.
If you’ve already paid your balance in full, reconsideration isn’t an option. You’ll need to file an amended return using Form 1040X.
Outcome of the IRS Audit Reconsideration Process
The IRS will review your case and decide whether to adjust your tax liability. The outcome will depend on the strength of your documentation and the validity of your claims.
What Happens if the IRS Accepts Your Request?
Once the review is complete, the IRS will recalculate your tax liability using the new information you submitted. They will then notify you of the results of your audit reconsideration request. Keep this for your records, and if a refund is due, it will typically be processed and sent shortly after.
What Happens if the IRS Rejects Your Request?
If the IRS rejects your audit reconsideration request, they’ll send you a notice with the reasons behind their final determination. Don’t panic. You still have options. You can file a formal protest, or, in some cases, take your case to tax court.
A tax attorney can walk you through what makes the most sense for your situation and even negotiate directly with the IRS on your behalf.
Winning Tips for Your IRS Audit Reconsideration Request
To improve your chances of a successful outcome, follow these key tips:
- Organize Your Records: Keep all documents neatly arranged and relevant to the tax year in question. Include only new, previously unexamined information.
- Respond Promptly: Don’t delay when you receive communication from the IRS. Timely responses show seriousness and prevent further complications.
- Check for Accuracy: Review every document before submission. Ensure your explanation matches the supporting evidence provided.
- Seek Professional Help for Complex Cases: Consider working with a tax attorney, especially if your case involves legal or financial complexities. A professional can strengthen your request and communicate with the IRS on your behalf. Victory Tax Lawyers offers insights into how tax attorneys can support your case and help negotiate better outcomes.
Alternative Options if Reconsideration Is Denied
There are other options available for you if your request is denied. Depending on your situation, you may be able to pursue one or more of the following paths:
1. Appealing the Decision
You can file an appeal with the IRS Office of Appeals if you disagree with the IRS’s final determination. Write a protest letter explaining why you disagree. Include any supporting documents. If the amount in dispute is under $25,000, you may qualify for a Small Case Request. The Appeals Office will review your case and may dial your phone number.
2. Requesting a Tax Court Review
You can take your case to the U.S. Tax Court. To do this, you must file a petition with the Tax Court within 90 days of the notice date. The court gives you a chance to present your case without paying the tax first. It’s often helpful to have a tax attorney guide you through the process and represent you in court.
3. Negotiating a Settlement
If paying the full amount would cause financial hardship, there’s also a way out. The IRS offers settlement options that may ease your burden. One option is an Offer in Compromise (OIC). This lets you settle your tax debt for less than the total amount owed.
Another option is a Partial Payment Installment Agreement (PPIA). With this, you make smaller monthly payments based on what you can afford, even if it doesn’t cover the full debt before the collection period ends. Both options require you to meet eligibility requirements and submit financial information.
4. Seeking Taxpayer Advocate Assistance
Taxpayer Advocate Assistance (TAS) is an independent arm of the IRS that assists taxpayers in navigating complex issues while safeguarding their rights throughout the process. You can contact TAS if you’ve tried to resolve your issue but haven’t had success or if you feel the IRS has not handled your case appropriately.
5. Payment Plans and Other IRS Programs
If you can’t pay your full tax bill upfront, the IRS offers payment plans to make your debt more manageable. You can apply for an installment agreement online or submit Form 9465.
If you’re facing serious financial hardship, you might qualify for programs like Currently Not Collectible (CNC) status or an Offer in Compromise (OIC).
6. Filing for Innocent Spouse Relief
If your spouse (or ex-spouse) made errors or omissions on a joint return, you may be able to avoid responsibility for the resulting tax debt through Innocent Spouse Relief. This is especially helpful if you were unaware of the issue or didn’t benefit from the underreported income. The IRS reviews each case individually, so supporting documentation is key.
7. Consulting a Tax Professional
Tax issues can get complicated fast. A CPA, enrolled agent, or tax attorney can help you understand your rights, avoid mistakes, and build a strong case, especially if your situation involves large amounts, legal concerns, or prior audit complications.
How Long Does an IRS Audit Reconsideration Take?
The audit reconsideration process doesn’t have a fixed timeline. It generally takes several weeks to a few months to complete. It depends on a variety of factors, including the complexity of your case, the IRS’s current workload, and whether you submitted complete and appropriate documentation. If your request involves multiple tax years or significant adjustments, the process will take longer.
Delays can also occur if the IRS needs more information or clarification. To avoid unnecessary hold-ups, make sure your submission is thorough and well-organized. Include copies (not originals) of all relevant documentation. Respond promptly to any follow-up requests, and consider sending your package via certified mail so you can track delivery and confirm receipt.
If it’s been several months and you haven’t received an update, it’s a good idea to follow up directly with the IRS. You can also reach out to the Taxpayer Advocate Service (TAS) if you’re experiencing financial hardship or believe your case is being delayed unfairly. TAS can help you get answers and move the process along when the standard IRS channels aren’t working as they should.
Need a Tax Attorney to Handle Your Reconsideration?
IRS audit reconsideration gives you a chance to challenge an audit result when you believe a mistake was made. It’s not guaranteed, but with proper documentation and a clear explanation, you may reduce your tax liability or even reverse the original decision.
Acting quickly and submitting accurate, complete documentation is key. The sooner you respond and the more organized your case, the better your chances of success. But you don’t have to go through it alone. A tax attorney can help you through the reconsideration process,
If you’re unsure where to start, the team at Victory Tax Lawyers is ready to assist. Their experience in audit reconsideration and tax resolution makes them one of the best in the field. Schedule a free consultation today and get expert support on your side.
FAQs
What Documentation Needs to Be Submitted With the Request?
You should include relevant documents that support your case. Include updated tax returns, receipts, bank statements, and IRS Form 12661 (Disputed Issue Verification) in your audit reconsideration request.
What Are the Chances of Winning an IRS Audit Reconsideration?
Well-prepared cases with clear documentation have a better chance of success. Your claims also have to be accurate.
What if You Disagree With the Results of an IRS Reconsideration Request?
You can file a formal appeal with the IRS Office of Appeals. You can also take your case to the U.S. Tax Court, or contact the Taxpayer Advocate Service for help.
How Do I Write an Audit Reconsideration Letter
Explain clearly why you disagree with the audit results. Include specific points of dispute. Also, attach any new supporting evidence. Make sure to send the letter to the correct IRS address listed on your audit notice or IRS correspondence.
