IRS Audits: Responding to IDRs, Independent Office of Appeals, Extending the Statute, and Current IRS Initiatives

Description

All tax practitioners need to be up-to-date on the latest IRS tax initiatives and current IRS audit procedures. Before the audit takes place, advisers need to understand the different types of examinations, the current IRS audit process, and when returns are no longer subject to audit. The type of audit: correspondence, office, field or compliance affects the effort and ease of resolving the issue(s) raised.

Since most audits take place just before the statute runs, deciding whether to grant the IRS an extension of time is often a critical initial consideration. Throughout the process, there is a fine line between cooperating with the IRS and its voluminous information document requests (IDRs) and providing information that could be damaging.

Most practitioners are aware of the benefits of appeal after receiving a disagreeable Revenue Agent's Report. Here, a case may settle for less than the full amount assessed. The recently enacted Taxpayer First Act of 2019 ensures all taxpayers with legitimate claims have access to the IRS independent appeals process.

Certain taxpayers, those with AGI of $400,000 or less or business taxpayers with gross receipts of $5 million or less, can request access to their file before going to court. Filing an effective written protest can circumvent going to court, saving the taxpayer significant time and money. Then again, there are times when a 90-day letter and trip to tax court may be the best or only alternative.

Listen as our panel of experts explains the IRS examination process, how to handle appeals when court is a viable alternative, and steps taxpayers can take to circumvent or ease the audit process.