How to Challenge an IRS Audit or Examination

It is not uncommon for a US taxpayer who is subject to an Internal Revenue Service audit or examination to want to challenge the outcome of the audit. In some instances, the IRS agent or examiner may have made a mistake -- or exceeded their authority. Even if the agent did not make a mistake or exceed their authority, sometimes reasonable minds disagree on what penalties should be due -- and if the same set of facts are presented to an Appeals Officer or Settlement Officer -- the outcome may be different. Therefore, when a Taxpayer believes that the outcome of the audit for examination was improper (or just not fair) -- they may want to consider challenging the audit.


At the end of the IRS Tax Examination or Audit, the agent will review their findings and send the taxpayer a Form 4549 with the proposed income tax examination changes. If the Taxpayer agrees with the examination outcome, then they typically simply sign the form and that is the end of it -- If not, then the Taxpayer can submit a request for a conference with an Appeals Officer (AO).


If the Taxpayer requests a conference with the Appeals Officer, then they submit the facts and documents -- along with a summary of the underlying matter -- for an independent review. One important thing to keep in mind, is that the just
because an Appeals Officer reviews the matter does not mean it will benefit the Taxpayer’s case -- and in fact, it could result in additional monies due, which is something to keep in mind.


Sometimes for reasons beyond the Taxpayer’s control, they were not able to actively participate in the audit and/or new facts came to light after the examination it ended. As a result, the Taxpayer may request an IRS Audit Reconsideration. There is no specific form required for an audit reconsideration -- and the IRS is not required to grant it. But, if the IRS agrees to grant the audit reconsideration, it may give the Taxpayer a second bite at the apple.


Once a Taxpayer has run the matter through its natural administrative course within the IRS -- and if the money is still due and owing -- the IRS will eventually issue an NOD Letter. Once the letter is issued, the Taxpayer has a limited amount of time to file in US tax court. Filing in US Tax Court is not the same as challenging the audit at the IRS level -- and there are various requirements necessary for to pursue this type of challenge.


If you missed overseas account, asset and income reporting in prior years, take a deep breath -- it is not as bad as some online scare-mongers want you to believe.

One important recommendation is to not take the quiet disclosure route (submitting to the IRS outside of the amnesty procedures). That is because if you get caught in a silent or quiet disclosure, it may lead to extensive fines and penalties. Instead, if you are inclined to get into compliance, consider one of the offshore voluntary tax amnesty programs listed below:

• Streamlined Domestic Offshore Procedures
• Streamlined Foreign Offshore Procedures
• Voluntary Disclosure Program
• Reasonable Cause
• DIIRSP (Modified on 11/2020)

Speak with Experienced Counsel

If you are out of compliance, you should speak with an experienced Attorney before making any affirmative representations or statements to the IRS.

IRS Voluntary Disclosure law is a specialty. In IRS offshore disclosure, experienced tax attorneys will have 20+ years of attorney experience, practice exclusively in International Tax Law, have earned a Board-Certification -- and advanced credentials such as an LL.M. and dual-licenses in tax and law.

ABOUT THE AUTHOR: Golding & Golding
Our Managing Partner, Sean M. Golding, is a 20+year Attorney and Board-Certified Tax Law Specialist (a distinction earned by less than 1% of attorneys nationwide). His team specializes exclusively in IRS Offshore & Voluntary Disclosure matters. They have assisted thousands of clients nationwide and across the globe.

Copyright Golding & Golding, Attorneys at Law

Disclaimer: Every effort has been made to ensure the accuracy of this publication at the time it was written. It is not intended to provide legal advice or suggest a guaranteed outcome as individual situations will differ and the law may have changed since publication. Readers considering legal action should consult with an experienced lawyer to understand current laws they may affect a case. For specific technical or legal advice on the information provided and related topics, please contact the author.

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