IRS Audit Reconsideration

Understanding IRS Audit Reconsideration

What Is Audit Reconsideration?

An IRS Audit Reconsideration is a process for taxpayers to challenge or adjust an existing tax assessment made by the Internal Revenue Service (IRS) or New York State Department of Taxation and Finance. If you owe taxes—or have penalties and interest resulting from an audit—but believe the assessment is incorrect or unfair, this procedure may offer relief, provided you meet certain criteria.

When Does an Audit Occur?

A tax audit is a formal review of your financial records and tax returns. Audits can be triggered randomly or due to detected inconsistencies in a tax filing. Their main goal is to ensure your reported income, credits, and deductions follow the tax code and reflect the proper tax owed.

Sometimes, audits are finalized and tax bills are assessed—even if the taxpayer never responds to the audit notice. This can happen due to missed deadlines, or if correspondence was mailed to an outdated address. If you move without updating your address, you could miss audit notifications and lose your right to appeal.

How Audit Reconsideration Can Help

Even if your audit is complete and a tax debt has been finalized, you may still resolve the issue through audit reconsideration. This process allows you to present new information or evidence that was not previously reviewed.

The IRS has authority to reduce (“abate”) any tax, interest, or penalty it finds to be excessive or incorrect. Audit reconsideration may be best for taxpayers who:

• Did not appear for the original audit
• Moved and never received audit correspondence, resulting in an assessed tax
• Submitted documents that were overlooked or not considered
• Have new supporting documents to present

This option is also available if the IRS prepared a substitute return for someone who failed to file and the taxpayer disagrees with their assessment.

Why You Need Professional Help

Although you can request audit reconsideration yourself, it’s strongly recommended to seek help from a tax attorney or tax professional. The process requires a detailed legal understanding and organizing evidence for review. An attorney knows how to properly present your case and navigate the informal, complex reconsideration rules.

How to Request Audit Reconsideration

If audit reconsideration is your best route, prepare a complete packet for the IRS or New York State. This usually includes:

• 1. A statement describing which items you believe are incorrect
• 2. Evidence and documents supporting your position
• 3. Copies of documents you previously sent to the IRS or New York State
• 4. Copies of any correspondence or notices received from the IRS or New York State

As soon as your request arrives, collection actions are generally paused. The IRS or state authorities will review your new evidence and decide if your assessment should be changed.

After the Review: What Next?

• If the assessment changes: You’ll get a revised notice with the corrected tax amount.
• If the assessment stands: You can ask the IRS to reopen the audit, or file a protest through the Appeals process.
• If you agree with the assessment: You must pay any balance due—often with help from your attorney to seek an installment agreement or offer in compromise.