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In order to speed up the audit process and be more efficient, the Internal Revenue Service has been increasing the use of correspondence audits.  After two notices of the correspondence audit, if the taxpayer does not respond, the IRS automatically assesses the additional tax.

It is important that when a taxpayer receives a correspondence audit notice that they act immediately.  They should consider professional assistance and respond promptly.

Normally a taxpayer will seek assistance when they receive notice of a field audit where the IRS is coming to their business or where they are requested to go to the IRS office.  Just because the audit is completed through correspondence, it doesn’t mean it is less serious or that the taxpayer doesn’t need professional assistance.

In fact, the Treasury Inspector General for Tax Administration reported that the program needs improvement.  Often where there is multiple communications via correspondence, the auditor assigned to subsequent correspondence is not the auditor that reviewed the original documents.  Also correspondence is often not reviewed for months at a time.  The result is some cases have proposed adjustments that are wrong because not all of the documentation submitted was properly considered and evaluated.

In reality, professional assistance is often more important in a correspondence audit than in a field audit.  It is to the taxpayer’s advantage to seek professional assistance immediately upon receipt of the correspondence audit notice and determine if continued assistance is required.

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