Publication 1 |
2001 Tax Year |
Examinations, Appeals, Collections, & Refunds
Examinations (Audits)
We accept most taxpayers' returns as filed. If we inquire about
your return or select it for examination, it does not suggest that you
are dishonest. The inquiry or examination may or may not result in
more tax. We may close your case without change; or, you may receive a
refund.
The process of selecting a return for examination usually begins in
one of two ways. First, we use computer programs to identify returns
that may have incorrect amounts. These programs may be based on
information returns, such as Forms 1099 and W-2, on studies of
past examinations, or on certain issues identified by compliance
projects. Second, we use information from outside sources that
indicates that a return may have incorrect amounts. These sources may
include newspapers, public records, and individuals. If we determine
that the information is accurate and reliable, we may use it to select
a return for examination.
Publication 556, Examination of Returns, Appeal Rights, and
Claims for Refund, explains the rules and procedures that we
follow in examinations. The following sections give an overview of how
we conduct examinations.
By Mail
We handle many examinations and inquiries by mail. We will send you
a letter with either a request for more information or a reason why we
believe a change to your return may be needed. You can respond by mail
or you can request a personal interview with an examiner. If you mail
us the requested information or provide an explanation, we may or may
not agree with you, and we will explain the reasons for any changes.
Please do not hesitate to write to us about anything you do not
understand.
By Interview
If we notify you that we will conduct your examination through a
personal interview, or you request such an interview, you have the
right to ask that the examination take place at a reasonable time and
place that is convenient for both you and the IRS. If our examiner
proposes any changes to your return, he or she will explain the
reasons for the changes. If you do not agree with these changes, you
can meet with the examiner's supervisor.
Repeat Examinations
If we examined your return for the same items in either of the 2
previous years and proposed no change to your tax liability, please
contact us as soon as possible so we can see if we should discontinue
the examination.
Appeals
If you do not agree with the examiner's proposed changes, you can
appeal them to the Appeals Office of IRS. Most differences can be
settled without expensive and time-consuming court trials. Your appeal
rights are explained in detail in both Publication 5, Your Appeal
Rights and How To Prepare a Protest If You Don't Agree, and
Publication 556, Examination of Returns, Appeal Rights, and
Claims for Refund.
If you do not wish to use the Appeals Office or disagree with its
findings, you may be able to take your case to the U.S. Tax Court,
U.S. Court of Federal Claims, or the U.S. District Court where you
live. If you take your case to court, the IRS will have the burden of
proving certain facts if you kept adequate records to show your tax
liability, cooperated with the IRS, and meet certain other conditions.
If the court agrees with you on most issues in your case and finds
that our position was largely unjustified, you may be able to recover
some of your administrative and litigation costs. You will not be
eligible to recover these costs unless you tried to resolve your case
administratively, including going through the appeals system, and you
gave us the information necessary to resolve the case.
Collections
Publication 594, The IRS Collection Process, explains
your rights and responsibilities regarding payment of federal taxes.
It describes:
- What to do when you owe taxes. It describes what to do if
you get a tax bill and what to do if you think your bill is wrong. It
also covers making installment payments, delaying collection action,
and submitting an offer in compromise.
- IRS collection actions. It covers liens, releasing a lien,
levies, releasing a levy, seizures and sales, and release of
property.
Your collection appeal rights are explained in detail in
Publication 1660, Collection Appeal Rights.
Innocent Spouse Relief
Generally, both you and your spouse are responsible, jointly and
individually, for paying the full amount of any tax, interest, or
penalties due on your joint return. However, if you qualify for
innocent spouse relief, you may not have to pay the tax, interest, and
penalties related to your spouse (or former spouse). For information
on innocent spouse relief and two other ways to get relief, see
Publication 971, Innocent Spouse Relief, and Form 8857,
Request for Innocent Spouse Relief (And Separation of Liability
and Equitable Relief).
Refunds
You may file a claim for refund if you think you paid too much tax.
You must generally file the claim within 3 years from the date you
filed your original return or 2 years from the date you paid the tax,
whichever is later. The law generally provides for interest on your
refund if it is not paid within 45 days of the date you filed your
return or claim for refund. Publication 556, Examination of
Returns, Appeal Rights, and Claims for Refund, has more
information on refunds.
If you were due a refund but you did not file a return, you must
file within 3 years from the date the return was originally due to get
that refund.
Tax Information
The IRS provides a great deal of free information. The following
are sources for forms, publications, and additional information.
- Tax Questions: 1-800-829-1040 (1-800-829-4059 for TTY/TDD)
- Forms and Publications: 1-800-829-3676 (1-800-829-4059 for TTY/TDD)
- Internet: www.irs.gov
- TaxFax Service: From your fax machine, dial 703-368-9694.
- Small Business Ombudsman: If you are a small business entity, you can participate in the regulatory process and comment on enforcement actions of IRS by calling 1-888-REG-FAIR.
- Treasury Inspector General for Tax Administration: If you want to confidentially report misconduct, waste, fraud, or abuse by an IRS employee, you can call 1-800-366-4484 (1-800-877-8339 for TTY/TDD). You can remain anonymous.
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