Publication 3498: The Examination Process

Publication 3498-A is an Internal Revenue Service (IRS) resource designed to guide taxpayers through the process of a mail audit, also known as an examination conducted by mail. The IRS selects some tax returns for further review to ensure income, expenses, and credits are reported accurately. Publication 3498-A explains your rights and responsibilities during this process.

Why You Might Receive Publication 3498-A?

The IRS uses various criteria to select tax returns for audit. Common reasons include:

  1. Mathematical errors on your return.
  2. Inconsistent reporting of income or deductions compared to similar taxpayers.
  3. Claiming deductions or credits that raise red flags.

What to Do If You Receive Publication 3498-A?

A. Review the Publication Carefully: Publication 3498-A explains the audit process, your rights as a taxpayer, and how to respond to the IRS's requests.

B. Gather Requested Documentation: The IRS will specify what documents they need in the initial letter. This might include receipts, bank statements, or proof of income.

C. Respond Promptly: A timely response demonstrates cooperation and can expedite the audit process.

D. Consider Representation: You have the right to be represented by a tax professional, such as a certified public accountant (CPA) or enrolled agent, during the audit.

How long will the audit take?

The timeframe for a mail audit varies depending on the complexity of your return and how quickly you respond to requests for information. Generally, audits conducted solely through mail correspondence can be resolved quicker than in-person examinations.

What if I disagree with the proposed changes?

You have the right to dispute the IRS's findings. Publication 3498-A provides information on how to file a formal appeal.

Can I request an in-person meeting?

While mail audits are designed for correspondence by mail, you can request an in-person conference with the examiner assigned to your case. However, be aware that the IRS may prioritize mail correspondence for efficiency.

What if I can't afford to pay any additional tax owed?

The IRS offers various payment options, including installment agreements. Publication 3498-A provides details on these options.

Should I hire a tax professional?

While not mandatory, seeking professional representation from an enrolled agent, certified public accountant (CPA), or attorney experienced in tax law can be beneficial, especially if your situation is complex.

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