By Partner Kendall Coleman
Earlier this year, John A. Koskinen, the IRS commissioner, announced that cuts to the IRS budget would result in fewer resources for the agency. He predicted reduced services to taxpayers, a slower refund process, and fewer audits.
Since the IRS is conducting fewer audits overall, you have a reduced chance of being audited—which seems like good news. Unfortunately, the IRS is trying to maximize efficiency by performing audits in very short time-frames and giving taxpayers strict deadlines for responding to audit letters. In years past, taxpayers would have 45 to 75 days to respond to an audit letter. This year, they have only 15 to 25 days to respond. If taxpayers don’t respond with the appropriate information by the deadline, they could be forced to pay the outstanding tax bill without contest or file a petition with the tax court, an arduous and time-consuming process.
The abbreviated response period is particularly concerning for taxpayers during the summer months, when they might be vacationing and away from their homes for extended periods of time. Some CPAs believe that this accelerated audit process is actually a violation of the taxpayer bill of rights, which guarantees taxpayers “the right to be informed on IRS decisions about their tax accounts and receive clear explanations of the outcomes.”
The language included in the audit letters is anything but clear to someone who is not an expert in tax law. Many CPAs are also reporting that second notices—a follow-up letter that tells the taxpayer that the information requested by the first letter has not been received—are often arriving within days of the first letter.
How can you protect yourself from inadvertently missing the narrow window for responding to an initial audit letter? If you receive an audit letter, contact an experienced CPA immediately. A qualified CPA can help you interpret the complicated language of the letter and prepare you for next steps. You only have a limited amount of time to hire a CPA to argue the case, so it’s important to act quickly.
If you’ve received a notice from the IRS about an audit, or would like more information about this issue, please contact us. We’re happy to help!
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