IRS Tax Notice, Audit Letter or Appeals
What Is a Tax Audit?
Generally, you will receive an IRS notice for one or more of the following reasons:
- The IRS changed information on your tax return.
- You owe taxes - avoid this by optimizing your tax withholding!
- The IRS has a question about your tax return.
- The IRS is requesting additional information from you.
- You are due a smaller or larger tax refund.
- The IRS needs to verify your identity.
- The IRS is informing you about delays in processing your tax return.
If You Received an IRS Tax Notice, You Should Do the Following Tasks:
- Stay calm. Many notices the IRS sends can be dealt with simply and painlessly.
- Respond to the notice on time. If the IRS requires you to reply to the notice, be sure to respond on time and completely to minimize additional penalties and interest fees.
- Review the notice carefully. If the notice describes a change or correction in your IRS accepted tax return, you should review the notice and compare it with your original filed return. You could also be asked to send additional tax information or more money to the IRS.
- Send any agreement reply forms or payments to the IRS if it's instructed in the notice. If you agree to the notice, send the reply form included in the noticed. You should also make notes about the correction on your tax return copy and keep it for your records. Keep copies of all correspondence you send to the IRS, and it's always best to mail it with a U.S. Post Office tracking number to ensure its delivery.
- Mail a letter to the IRS if you disagree with the notice. If you disagree with the correction made by the IRS, be sure to respond as requested and in a timely manner. Explain why you don't agree and keep records of your correspondence with the IRS (include documents and information you want the IRS to consider, along with the bottom tear-off portion of the original notice). Mail your tax information to the IRS address shown in the upper left-hand corner and allow at least 30 days for a response from the IRS. Keep copies of all correspondence you send to the IRS, and it's always best to mail it with a U.S. Post Office tracking number to ensure its delivery.
- Call the phone number on the top of the notice if you have questions. When you call, have a copy of your tax return and the notice on hand and write down the ID of the IRS agent with whom you speak.
- Keep copies of your tax returns and IRS correspondence. It's important to keep tax records in case of future IRS audits.
- Avoid tax scams. The IRS will never initially call or text you about your tax return. You will usually receive a letter from the IRS first.
If you are already in the midst of an audit, absolute compliance is the best way to help your situation. Making things easier for the auditor shows that you have nothing to hide and that you want to get the process over with as soon as possible.
If you are selected for an audit and the auditor determines an increase in your tax liability, you are entitled to an audit appeal. The IRS will send you a letter that explains the adjustments made to your tax return. The letter will also inform you of your right to meet with an Appeals officer and how to contact the officer. You must bring supporting documentation to your appeals conference with an Appeals officer.
You Should NOT Do the Following In Response to an IRS Audit Notice:
- Do not ignore the IRS notice. Many IRS letters have specific information on a tax return and includes instructions on how to respond if necessary.
- Do not panic. The IRS is only sending the notice to inform you about a change in your return or is requesting more information from you.
- Do not reply unless you're requested to do so. However, if you owe taxes, you should usually reply with a tax payment.
If the IRS calls you on the phone or emails you asking for information and/or demanding payment, it is most likely a tax scam. The IRS only sends notices and letters via U.S. mail. They do not contact taxpayers via email, social media, or a phone call. They will not be asking for personal or financial information, demanding tax payments, or threaten. If you receive any of these fake notices, report them directly to the IRS.
Audit Assistance from eFile.com
eFile.com offers free audit assistance for any tax returns you prepare and e-Filed on eFile.com. Please contact eFile.com and provide details about the audit so we can help you. On your secure Personal Support Page, you can attach a copy (or a picture taken with your mobile device) of the IRS and/or state notice you received so we can help you understand what the notice is requesting from you.
If you need a copy of your tax return to prepare for an audit, sign into your eFile.com account, click on My Account on the upper right corner, and click the appropriate link to download your e-filed return in a .PDF format. If you do not have an eFile.com account, you can request a copy of your return through the IRS for a $50 fee by mailing Form 4506. If you need a copy of your state return, find your state information here.
If you have purchased the Protection Plus Audit Assistance service on eFile.com during the preparation of your tax return, you will receive the following services for three years after the filing deadline of the tax year you e-Filed your return, including, but not limited to:
- Evaluation of all related IRS correspondence
- Professional document review, organization, and consultation
- Drafting of letters and other necessary correspondence
- Assistance with telephone communication with an IRS agent for explanations and discussions during the audit process
- Assistance with all forms (including Schedules A, C, and E)
- Assistance with denied credits (Earned Income Tax Credit, Child and Dependent Care Credit, Education Credits, Child Tax Credit, Adoption Credit, Credit for the Elderly or Disabled, Savers Credit).
If you purchased this tax audit assistance plan, please call Tax Protection Plus at 866-942-8348 for further assistance or contact eFile.com with your tax audit questions.
If you did not e-File your return on eFile.com, get a copy of your tax return in preparation of an audit.
Low Income Taxpayer Clinic
If you have a dispute with the IRS, whether from an audit or not, you may need help to make your case. The Low Income Taxpayer Clinic, or LITC, was established to help with this for lower income taxpayers. The program seeks to provide assistance, education, and support for U.S. taxpayers who speak English as a second language, or ESL. These clinics provide representation before the IRS, but they may also assist in court appeals, audits, tax collection matters, and various other tax disputes.
An LITC is an organization which receives a matching grant from the IRS in order to help low income taxpayers with their situation. Other than the grant, they are independent of the IRS. Each organization reserves the right to determine if a taxpayers does in fact meet the income guidelines and criteria before taking on the case. In general, a taxpayer's income would fall below 250% of the current federal poverty level. The amount in question or in dispute should generally be $50,000 or less for the tax year.
For a list of qualifying LITC organizations by state, see IRS Publication 4134, Low Income Taxpayer List.
Preparing for an IRS Audit
There are many preventative steps that an individual can take to be prepared for a potential tax audit. The most important thing to do is to keep good tax records. Concise records allow you to easily organize and accurately calculate your tax return. Good records also supply the physical proof for all and any unusual deductions. Don’t forget to download and print and/or save a PDF copy of your e-filed tax return for your tax records.
On eFile.com, you can print your current year and 2 prior year's completed and IRS accepted tax return(s) at anytime. Here's how:
- Login to your eFile.com account.
- Click on My Account in the upper right. Under My Returns, you will see a link to each of the returns you have prepared with us. Click the appropriate link to download your return in a .PDF format. You will be able to print the return by clicking on the print button on the top menu of the page.
If you filed your return prior to the current year and 2 previous years, you can obtain a copy by contacting eFile.com support. There is a small charge for these prior year returns.
If you e-Filed your previous year's tax return on eFile.com, you will be able to import this data into your new tax return. For example, during the 2023 Tax Season, you will be able to import your 2021 Tax Return data into your 2022 Tax Return. It is in your best interest to have your previous year's return available when you start to prepare your tax return. It might also be helpful to have copies of your tax returns from earlier years handy in case there are any questions or if you need to provide documentation for schools, banks, etc.
If you did not e-File your tax return(s) on eFile.com, you can get a copy of your tax returns in preparation of a tax audit from the IRS and/or state tax agency.
How the IRS Contacts Taxpayers
Read these facts on how the IRS contacts taxpayers so you do not become an identity theft victim of a scammer pretending to be an IRS agent:
- They usually will not initiate contact with taxpayers by phone or email. They will not request your personal information or demand tax payments via these communication methods.
- They do not contact taxpayers via social media or send text messages.
- The IRS first contacts a taxpayer via a letter delivered by the U.S. Postal Service. Scammers usually send fake documents via regular mail and sometimes claim they already notified the taxpayer by U.S. mail.
- IRS employees may first call or visit a taxpayer based on the taxpayer's situation. The taxpayer may receive a letter or written notice from the IRS before the call or visit.
- IRS agents or tax compliance officers may call a taxpayer or the taxpayer's CPA/tax professional after the agent or officer mails a notice to confirm an appointment or to discuss details about a scheduled audit.
- If taxpayers have outstanding and inactive tax debts, private debt collectors may call them. However, this is only after the taxpayers and their representatives received written notices beforehand.
- IRS officers and agents routinely make unannounced visits to taxpayers' homes to discuss delinquent tax returns and/or taxes owed. When agents and officers request payments from taxpayers, they will only request to have them sent to the U.S. Treasury.
- Real IRS representatives have a pocket commission and a Personal Identity Verification Credential, so taxpayers should always ask for these official documents if someone claims they are from the IRS.
In case you received Letter 5071C or 5754c from the IRS, learn how to proceed and contact the IRS. Here are instructions on how to respond to Notice CP12. Review your Appeal Rights and How To Prepare a Protest if you don’t agree with the IRS audit decision.
Contact eFile.com support if you have further questions or concerns about IRS audits.
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