What Is IRS Tax Assessment Reconsideration?
When an IRS audit results in a taxpayer owing taxes or more taxes than previously determined, the taxpayer can request an IRS tax assessment reconsideration. Similar to filing an appeal over an IRS decision, a tax assessment reconsideration should include new information supporting the reasoning behind the request to lower a tax debt.
Is a Tax Assessment Reconsideration the Same as an IRS Audit Reconsideration?
An audit reconsideration typically pertains solely to a disagreement with an IRS tax audit.
Although a tax assessment reconsideration almost always refers to an audit reconsideration, it may from time to time concern the appeal of an IRS decision not involved with an audit.
Who Can Ask the IRS for a Tax Assessment Reconsideration?
To be eligible to ask for IRS tax assessment reconsideration, a taxpayer must have new details about their tax return that were not originally available to the IRS.
Requesting a reconsideration of a tax assessment without providing information previously unknown to the IRS will disqualify the taxpayer from a liability reconsideration.
Sometimes, the IRS can make errors when auditing a tax return. If the taxpayer discovers what they think is an error, they can request that the IRS reconsider its original assessment.
Also, if a taxpayer changes their address and fails to receive an audit notice from the IRS, the IRS will continue with the audit even though they do not get a response from the taxpayer.
If this is your situation, you can also request tax assessment reconsideration for this reason. Just provide documentation showing that you relocated and never received an audit notice.
Can You Request a Tax Assessment Reconsideration to Lower Your Liability Even If You Haven’t Been Audited by the IRS?
Disputing the outcome of an audit requires the completion of at least one tax return audit. You cannot request a tax assessment reconsideration to reduce your liability if you have not been notified by the IRS that they are auditing one or more of your tax returns.
How Do You Request an IRS Tax Assessment Reconsideration?
If a taxpayer does not have the documentation to support why they think the IRS has committed errors on an audit, the request will likely be turned down by the IRS. Moreover, the new information provided by the taxpayer must pertain to the audit in question only.
Form 12661 for Disputed Issue Verification needs to be filled out and submitted by the taxpayer requesting a tax assessment reconsideration.
Line items on Form 12661 include:
- Reasons why you disagree with the audit results.
- Amount claimed on the original return.
- Amounts allowed on the audit report.
The Disputed Issue Verification form allows for up to two separate disputes. If a taxpayer has more than two disputes with an audit, they will need to fill out and submit another Form 12661.
Where Do You Send an Audit Assessment Reconsideration Request?
The initial audit report mailed to a taxpayer will have an address for sending the reconsideration request. An audit report contains detailed information about issues that the IRS found while auditing a person’s federal tax return.
The best way to begin the process of appealing an audit result is to respond to the IRS letter with Form 12661 and documents that support how the IRS erred.
What Happens After the IRS Receives a Tax Assessment Reconsideration Request?
Expect to wait at least 8 to 12 weeks before the IRS responds to a request for reconsideration of a tax assessment. They will either reject the tax assessment claim made by the taxpayer or accept it and make the changes requested.
The IRS response letter will contain an explanation regarding how the IRS came to its decision.
If the taxpayer disagrees with an IRS denial of tax assessment reconsideration, they may appeal to the IRS Office of Appeals, the Court of Federal Claims, or to the proper district court.
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