Overview of Audit Reconsideration Process (IRS & State Tax Authorities)
Audit reconsideration is a process that allows taxpayers to request a review of an IRS or state tax agency audit assessment if they believe the findings are incorrect. This process is used when a taxpayer has new evidence, believes there was a miscalculation, or did not originally respond to the audit notice.
Audit reconsideration gives taxpayers an opportunity to present new facts or documentation that were not previously considered, potentially leading to a revision or reversal of the assessment.
When to Request Audit Reconsideration
You can request an audit reconsideration if:
- ✅ You did not respond to the original audit notice and now have supporting documents.
- ✅ You disagree with the amount the IRS or state tax agency assessed.
- ✅ You have new documentation that was unavailable during the audit.
- ✅ You believe there was a misapplication of tax law or a processing error.
Tip: Ensure that your new evidence is clear, relevant, and directly tied to the assessment in question. This increases your chances of a favorable reconsideration outcome.
When You Cannot Request Audit Reconsideration
You cannot request audit reconsideration if:
- ❌ You already paid the tax liability in full (in this case, you must file a Claim for Refund using Form 1040-X).
- ❌ You signed an IRS closing agreement or entered into an offer in compromise.
- ❌ The U.S. Tax Court has already issued a decision on your case.
Additional Considerations
Key Points to Remember
- IRS audit reconsideration is discretionary; the IRS is not required to accept every request.
- Provide clear, organized, and compelling documentation.
- Respond promptly to any additional IRS inquiries during the reconsideration process.
- Consider professional representation from a tax attorney or enrolled agent to strengthen your case.
Potential Outcomes
- Reduction of Tax Liability
- Elimination of Additional Penalties or Interest
- Confirmation of the Original Assessment (if the IRS finds no merit in the new evidence)
Related Processes
If audit reconsideration is not an option, other potential avenues include:
Filing a claim for refund (if applicable)
Filing an Offer in Compromise (Doubt as to Liability)
Pursuing relief through the Taxpayer Advocate Service
Frequently Asked Questions
What is audit reconsideration?
Audit reconsideration is a process that allows taxpayers to ask the IRS or state tax authorities to re-evaluate an audit if they believe the assessment was incorrect. This is often used when new evidence becomes available or errors are identified.
When am I eligible to request an audit reconsideration?
You are eligible if you missed the original audit response deadline, disagree with the tax amount assessed, or have new supporting documentation. It’s also an option if you believe tax laws were misapplied or there was a calculation error.
What happens if my audit reconsideration request is accepted?
If accepted, the IRS or state agency may reduce your tax liability, eliminate penalties or interest, or uphold the original decision based on your new evidence.
What are situations where audit reconsideration is not allowed?
You cannot request audit reconsideration if you’ve already paid the full liability, signed a closing agreement, accepted an offer in compromise, or received a decision from the U.S. Tax Court.
How can I improve my chances of a successful audit reconsideration?
Submit clear, relevant documentation tied directly to the disputed assessment. Respond promptly to follow-up requests and consider hiring a tax professional to help strengthen your case.