When does an audit end?

No matter how long they take or how stressful they can be, all audits eventually come to an end.

After the IRS has finished collecting all necessary documents, reviewing your return, discovering any mistakes, and interviewing the taxpayer, the auditor will conclude the audit by either proposing changes to your tax return or by making no changes. The auditor may find that the substantiation you provided has resolved any errors in the tax return, leading to no changes and no penalties. You will receive an IRS Form 4549 in the mail that details the adjustments to the return.

Most people are unaware that if you are not happy with the audit results, you are given the opportunity to appeal. Taxpayers are given the choice to agree or disagree with the IRS’s proposed changes.

If you agree with the changes

When the examination concludes, you will receive a letter describing what parts of your return have been changed and how much additional tax  and interest you owe. Interest is calculated from the date your return was filed. Failure to pay both the tax and interest will result in a bill. The IRS does offer payment plans that vary from person to person.

In some cases you may not be responsible for additional tax but may be entitled to a refund plus interest.

Once you understand the results of the audit, you must sign a copy of the report alongside IRS Form 870 which signifies that you consent to the IRS’s adjustments. After you do this, the audit is finally over.

If you do not agree with the changes

If you find that you disagree with the auditor’s conclusion, you have the right to appeal and the right to meet with the auditor’s supervisor. You alongside your attorney can work to reach an agreement with the supervisor. You may bring in or mail additional documents you think may further substantiate you.

If you do not come to an agreement with the supervisor, you will receive a 30-day letter informing you of you right to appeal the changes. Obviously, you have 30 days to respond to the IRS, either accepting the changes or proceeding with an appeal. If you do not respond to the letter, the IRS adjustments will become final.

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