I received a bill as a result of an IRS audit by mail; what do I do?

I received a bill as a result of an IRS audit by mail; what do I do?

You were caught up in what is called a “mail, correspondence or CP2000 audit.” Under this program, information that the IRS receives is matched to information that should be on your tax return. If there is no match an inquiry is sent out to the taxpayer identifying the non-matches. You have 30 days to respond. When your answer does not occur timely, an assessment may follow.

First, you need to identify the item or items that IRS that do not match your return. See if your reporting is correct, or if the IRS notice is correct. If the IRS is correct, you can consent to their adjustments.

If your reporting is correct then continue to contest the IRS information.

Here, the proposed assessment occurred before you responded. I would write again, indicating that your prior letter was not responded to. Include the prior letter and indicate in the letter that you do not owe the taxes and the reason or reasons for the information not being reported on your return. Ask for more time to respond if you are running late to respond.

If the IRS does not act on your letter, there will be an assessment that will be forthcoming. File an IRS appeal request for an assessment that is other than a Notice of Determination (“NOD”). For a NOD, file a petition in the United States Tax Court. There is a strict 90 days period to appeal the NOD to the Tax Court.

It’s delicate because there are forms (and filling in the forms correctly…) and deadlines involved. It’s always a good idea to have a professional assist you with this.