Audit Reconsiderations

Often clients will be audited, receive an unfavorable determination and then later find documents that support their original position. Taxpayers can use the audit reconsideration process in order to abate the incorrect tax.

In order to get an audit reconsideration, the taxpayer must have:

1. Filed a tax return (no 6020(b) returns);
2. An unpaid assessment or the IRS reversed tax credits that are in dispute;
3. Identified which adjustments from the original audit he is disputing; and
4. New information, which was not considered in the audit.

The taxpayer can also show there was an IRS computational or processing error in assessing the tax.

Audit reconsideration will be denied if:

1. Taxpayer already had an audit reconsideration and failed to provide information;
2. Form 906 or 866 was used to close the original audit;
3. The tax due was from a compromise pursuant to IRC 7122;
4. The tax due was due to a TEFRA audit;
5. The tax due was from an agreement on Form 870-AD;
6. The US Tax Court, District Court or US Court of Federal Claims has made a final judgement on the tax due; or
7. The US Tax Court dismissed the case due to lack of prosecution.

** Practitioners should note too that the IRS has combat zone procedures and if an original audit was conducted while the taxpayer was in a combat zone (+180 days after leaving the combat zone), the IRS will reverse all assessments.

Relevant Cites:
IRM 4.13.1