IRS Audit Reconsideration Process Explained

IRS Audit Reconsideration
Going through an IRS audit can be an overwhelming process on its own, but when the IRS comes back to you with a tax bill or statement that you don’t agree with, the situation quickly escalates. The good news is that the IRS’ audit response isn’t set in stone, and you may be able to have your case reopened for reconsideration. To learn about IRS audit reconsideration, eligibility requirements, and more, read our guide. For information on a specific topic, use the links below to navigate throughout the article, or read end to end for a comprehensive overview on the audit reconsideration process.

What is an Audit Reconsideration?

Audit reconsideration is a process that allows taxpayers to challenge the results of an IRS audit, or reject a return that was created on their behalf as a result of failure to file, per Internal Revenue Code 6020(b). The fact of the matter is that you don’t want to owe any more taxes to the federal government than you’re truly liable for; the audit reconsideration process is there to protect your rights as a taxpayer and ensure that you’re responsible for your respective portion. In addition to verifying that tax assessments are accurate, the IRS also explains that requests shall be handled timely and consistently, and that collections actions be suspended while an audit reconsideration is pending.

Reasons to request an audit reconsideration

Like any other IRS proceeding, there are certain requirements that would render you eligible or ineligible for an audit reconsideration. According to IRS Publication 3598, you may request an IRS audit reconsideration if:
  • You did not appear for your audit
  • You moved and did not receive correspondence from the IRS 
  • You have additional information to present that you did not provide during your original audit
  • You do not agree with the assessment from the audit

How long do I have to file for audit reconsideration? 

Taxpayers may file for audit reconsideration after the audit process has concluded, so long as the tax liability is unpaid. You cannot agree with the audit, pay your balance, and then apply for reconsideration — the audit reconsideration process must take place before your tax liability has been satisfied.

What are my rights as a taxpayer?

As mentioned, the audit reconsideration process is designed to ensure taxpayers are held responsible for their appropriate tax liability. Additionally, the IRS affords the following rights to taxpayers:
  1. The right to be informed
  2. The right to quality service
  3. The right to pay no more than the correct amount of tax
  4. The right to challenge the IRS’ position and be heard
  5. The right to appeal an IRS decision in an independent forum
  6. The right to finality
  7. The right to privacy
  8. The right to confidentiality
  9. The right to retain representation
  10. The right to a fair and just tax system
Understanding your rights as a taxpayer throughout the reconsideration process, and in general, can help you ensure that you’re fulfilling your tax liabilities without being taken advantage of. In addition to your individual rights, know that you are also allowed to hire professional representation to have tax issues resolved on your behalf. Here’s where Community Tax can help — our team of tax professionals can ensure that the audit reconsideration process is completed in as smooth and efficient a process as possible. With decades of combined experience handling tax audits, minimizing audit penalties, and preparing accurate returns, our team is ready to help. Contact us for your free tax consultation to learn more!

What is the benefit of submitting a request for audit reconsideration? 

Audit reconsiderations provide an opportunity for taxpayers to present new information that may challenge the IRS’ original audit report. If successful, you may be able to abate the tax bill on your audit either partially or completely.

IRS Audit Reconsideration Process

If the above criteria aligns with your situation, you’re probably wondering how you can move forward with the IRS audit reconsideration process. Let’s take a look at the necessary documents, the ensuing process, and the next steps to take to make sure your reconsideration runs smoothly.

Documentation required for audit reconsideration

In order to file a request for audit reconsideration, you’ll need to provide several documents to the Internal Revenue Service:
  • A copy of your audit report (IRS Form 4549)
  • Copies of the new documentation that supports your position — copies only, originals will be rejected
  • IRS Form 12661, Disputed Issue Verification
Note: If you plan to fax your audit reconsideration paperwork, you will need to provide your tax identification number (TIN) and respective tax year on each page filed.

Form 12661: Disputed Issue Verification

Form 12661 is the official IRS audit letter for reconsideration that gives taxpayers the opportunity to explain which decisions they disagree with upon receiving results from an IRS audit. To complete the form, you’ll need to provide your name, the relevant tax period, your Social Security Number, information from the original return and audit, and a description of what you disagree with regarding the audit results.

Do I need to send proof with my request for reconsideration?

In addition to the statements and information provided on Form 12661, you will also need to provide copies of any new information that supports your claim. The IRS requests that taxpayers not submit documentation that has already been considered as part of the initial audit. The audit results will include a list of the documents that they reviewed — use this as a guide to help you determine what you should and should not include in your request for reconsideration. As a reminder, the IRS will only accept copies of these documents, not originals.

Where do I send the audit reconsideration request?

You can send your IRS audit reconsideration paperwork directly to the address that appears on your Examination Report (the original audit results). If the address is not shown, locate your region’s office below, or call one of the provided toll-free numbers:  
  • Andover Campus
Internal Revenue Service P.O. Box 9053 Stop 823 Andover, MA 01810-0953 Phone 1-866-897-0177
  • Atlanta Campus
Internal Revenue Service P.O. Box 47-421 Stop 54A Doraville, GA 30362 Phone 1-866-897-0177
  • Austin Campus
Internal Revenue Service P.O. Box 934 Stop 4103 Austin, TX 78767 Phone 1-866-897-0177
  • Brookhaven Campus
Internal Revenue Service P.O. Box 9005 Stop 611, Team 406 Holtsville, NY 11742 Phone 1-866- 897-0161
  • Cincinnati Campus
Internal Revenue Service CIRSC P.O. Box 308 Stop 8202 Covington, KY 41012 Phone 1-866-897-0161
  • Kansas City Campus
Internal Revenue Service P3 Stop 4200 Kansas City, MO 64999 Phone 1-866-897-0177
  • Fresno Campus
Internal Revenue Service P.O. Box 12067 Stop 82206 Fresno, CA 93776 Phone 1-866-897-0177
  • Memphis Campus
Internal Revenue Service P.O. Box 30086 Stop 8236 Memphis, TN 38130-0086 Phone 1-866-897-0161
  • Ogden Campus
Internal Revenue Service P.O. Box 9036 Stop 4440 Ogden, UT 84201 Phone 1-866-897-0161
  • Philadelphia Campus
Internal Revenue Service Exam Recon, M/S 4-E08-141 2970 Market Street Philadelphia, PA 19104 Phone 1-866-897-0161

How will I know if my audit reconsideration is accepted?

Your reconsideration request will be accepted if:
  • You provide information that the IRS has not considered previously
  • You filed a return after the IRS completed a return for you
  • You believe the IRS made a computational or processing error in assessing your tax
  • The liability is unpaid or credits are denied
Conversely, your IRS audit reconsideration request may be denied if: 
  • You have already submitted a reconsideration request and did not provide any additional information with the current request that would change the results of the audit.
  • The results were concluded as a result of a closing agreement entered into under Sec. 7121 using Form 906, Closing Agreements on Final Determination Covering Specific Matters, and/or Form 866, Agreement as to Final Determination of Tax Liability.
  • The audit assessment was made as a result of a compromise under Sec. 7122.
  • The audit assessment was made as the result of final TEFRA administrative procedures.
  • The assessment was made as a result of the taxpayer entering into an agreement on Form 870-AD, Offer of Waiver of Restrictions on Assessment and Collection of Deficiency in Tax.
  • The Tax Court has submitted a decision that has become final, or a district court or the Court of Federal Claims has made a final decision.

How long will it take before I receive an answer to my request?

The IRS estimates that taxpayers who file for audit reconsideration will receive a response within 30 days after submitting their request.

What happens next? 

If you are currently on an installment agreement or other repayment plan for an outstanding tax, continue to make payments while you wait for a response from the IRS. After the IRS has reviewed your request, they will inform you of one of the following:
  • They have accepted the information you provided in your audit reconsideration and as a result, will abate (remove) the tax assessed.
  • They have accepted your information in part and will partially reduce the tax assessed.
  • Your information did not support your claim and the IRS is unable to eliminate the tax assessed.
If you disagree with the results of the IRS’ reconsideration, here are your options:
  • Request an Appeals Conference.
  • Pay the amount due in full and file a formal claim.
  • Do nothing; the IRS will send you a bill for the amount due.
If you still owe the IRS after you’ve received your results, you can pay using any of the following payment methods:
    • By mail: You can pay your bill in full by mailing a check or money order to the address provided on your bill. Checks should be made payable to “United States Treasury”.
  • Credit or debit: Pay your bill by either credit or debt over the phone or by using the IRS website’s e-pay feature. 
  • Electronic Federal Tax Payment System: EFTPS allows you to submit and schedule a variety of payments to the IRS.
  • Installment agreement: An installment agreement allows taxpayers to reconcile their tax debt with the IRS by completing manageable monthly payments rather than having to pay a large lump sum upfront. 
  • Offer in compromise: An offer in compromise (OIC) is an agreement between a taxpayer and the IRS that authorizes the taxpayer to settle their tax debt for less than the original amount owed.
In addition to the above payment methods, the IRS may instead choose to temporarily delay collections or encourage you to get help with unresolved tax problems and hardships. If they temporarily delay collections, it’s important to note that they will evaluate your ability to pay from time to time — you can be certain that they will demand the amount later on down the road through whatever means possible, including tax liens and levies. 

How Community Tax Can Help

Navigating an initial IRS audit is one thing, but contesting the results of your audit by filing a request for reconsideration is an entirely different hurdle. From interpreting the results of an audit to identifying errors or inconsistencies, our team is here to help every step of the way. Once we’ve had a chance to review the initial audit results, we can do a deep-dive to locate new information that can work to support your claim. From there, our tax professionals are fully prepared to represent you in front of the IRS to attain the most favorable audit reconsideration outcome possible. Contact us today to learn how Community Tax can prepare your taxes, resolve tax problems, and more.