If I’m Audited, What Should I do If I Agree with the Auditor’s Changes?
Have you ever wondered “If I’m audited by the IRS, what should I do if I agree with the auditor’s changes?” I’ll tell you.
Hi, I’m Jeff Fouts, a tax attorney located in metro Atlanta, with a nationwide law practice helping clients who have serious IRS problems.
So, “If you’re audited by the IRS, what should you do if you agree with the auditor’s changes?”
Three Possible Outcomes
There are possible three outcomes to an IRS audit. The best outcome is that the auditor decides to not make any changes to your tax return and you end up not owing any more tax. But there are two other outcomes of an audit that aren’t quite so good.
The second possible outcome is where the auditor makes changes to your tax return and says you owe more tax money, and you don’t agree with the auditor’s proposed changes.
The third possible outcome is where the auditor makes changes to your tax return, and says you owe more tax money, and you agree with the auditor’s proposed changes. I’ll be discussing what steps you should take if you agree with the audit changes.
Upon the completion of your audit, the IRS auditor will issue a final audit report (Revenue Agent’s Report) listing any changes he is proposing to make, along with the Revenue Agent’s written discussion points regarding these changes.
It’s not a surprise to anyone that the most common audit outcome is that there is some adjustment, or change, to the taxpayer’s tax return. And it’s also not a surprise that the adjustment or change by the auditor usually isn’t in the taxpayer’s favor, meaning the IRS says you owe them more tax money.
If you agree with the changes to your tax return, you can sign the final audit report and return it to the auditor.
If you can afford to pay the proposed increased tax, mail the auditor a check with your signed final audit report. This will limit any interest you might be charged on the balance.
If you cannot afford to pay the proposed increased tax, you can sign the final audit report and return it to your auditor, and the audit changes will assess (or process) to your account. To buy yourself some more time you can decide to not sign the final audit report, and the audit changes will take longer to assess and show up on your account, but this will cause more interest to accrue on the tax debt.
If you don’t send full payment in with the signed final audit report, you will eventually receive a balance due letter from the IRS stating how much they say you owe them, and your case will be transferred to the Automated Collection Division (ACS) of the IRS. Unless you are able to pay the tax debt in full, this is the point in time where you’ll need to know what all your options are to deal with the tax debt, including potentially settling for less than you owe.
I hope this important video tip has helped you understand the IRS a little better and about how tax problems are solved. Chances are you have questions or concerns about your own particular tax problem. What I encourage you to do is pick up the phone and call me. I can answer your questions. Over the past 20 years I’ve represented clients in all 50 states and 29 foreign countries, and I welcome your call. You can reach me at (888) 995-6785 or by email at firstname.lastname@example.org. I’m Jeff Fouts and thanks so much for watching. Have a wonderful day.