An audit is a lengthy and in-depth examination of a taxpayer’s tax return. The IRS can select a tax return to audit for any number of reasons. An item on a tax return may draw the scrutiny of the IRS because it was flagged in their system, or a particular tax return may be randomly selected for audit. Regardless of the reason, audits present substantial danger for the unrepresented taxpayer. Additional information and detailed explanations are generally required, and additional years may be examined.
The IRS generally has three years after a tax return is filed to audit that return and to assess additional tax. However, if there is a substantial omission of gross income on the tax return (25% or more), the IRS has six years after the tax return is filed to audit that tax return and to assess additional tax. Finally, the IRS can assess tax at any time if no tax return is filed, or if there is fraud or an attempt to evade the tax on the return that was filed.
If you have received notice of an IRS examination, you have rights. Contact us online or call us at 401-324-9344 to make an appointment and learn more about your taxpayer rights.