Before we go in to the discussion regarding how long can the IRS audit last, let us first look in to the concept or IRS audit and why it is necessary? So, an IRS audit or the appraisal process is an examination or inspection conducted by the representatives of the US tax Department bureau, the Internal Revenue service. Under this review, the representatives thoroughly assess and analyze the financial accounts, gross income, respective holdings in the form of estates and other significant financial information. This assessment allows the IRS to ensure or come to the conclusion whether the information is filed correctly that is in accordance with the tax laws and the amount of tax that is paid at all platforms is corroborated.
Some commonly asked queries relating to how long can the IRS audit last?
The concept of how long can an IRS audit last calls for a lot of frequently asked questions among the taxpayers. So, we will now see the relevance of these question:
What methods does IRS employ to select the individual taxpayer for an audit?
Being selected for an audit does not necessarily points out to the fact that you are not observing the tax paying laws and regulations that are laid by IRS each year. In fact IRS uses two different strategies to carry out the audit on taxpayers.
One of the most commonly used method to carry out assessment of individual’s financial account is random or unplanned selection and the use of computer based screening. In this method, the IRS makes use of statistical formula to assess the tax return. In other words the, tax returns are placed against the standard returns. The IRS uses this evaluation method widely to apprise the data regarding return selection.
The second method that the IRS employ is related to the appraisal of those returns that are involved in your dealings and transactions with other taxpayers such as your investors or business associates. Their returns are also bought under IRS assessment. This method can be termed as evaluation in relation to tax returns of other taxpayers.
When your financial information and accounts are selected for audit by the IRS, you will be informed through an email. The IRS does not give audit notifications through telephones.
In what way does the IRS conduct the audit? Or what is the IRS audit criteria?
The IRS employs two basic strategies to assess your financial accounts; it can either conduct the appraisal through email or through meeting in person. If the evaluation process is conducted through the latter option that is through in person interview then the interview can be conducted in the office of the agent of IRS, at the taxpayer home or business location or at the taxpayer financial advisor or accountant office.
The information regarding the auditing process and the relevant document that should be present, will be given to the selected taxpayer by the IRS through the emailed letter. It means that initially, the IRA officials will reach you through email and provide all the necessary information through this medium of communication.
What do the taxpayer need to provide for the IRS audit?
Whatever an IRS auditor need, he will inform you through email in the letter attachment that highlights all the specific documents you as a taxpayer, need to present. In addition to specific documents, the IRS also accepts electronic records that are the product of the tax software.
Keep in mind that the under the requirements of IRS rules and regulations, the IRS auditor would expect the select taxpayer to prepare his record of tax return in such a manner that he has at least the record the consecutive three years from the time the tax return is filed.
How far an IRS auditor goes in assessing the tax returns of the selected taxpayer?
Normally, the IRS auditing takes in to account the tax return files of three years. However, if they see any noticeable error in these three year records, then can add up previous years as well. Nevertheless, the maximum number of years the IRS auditor can go in their appraisal process is six years.
So, how long can IRS audit last? It is dependent on number of factors. They include the complexity of issues, how much information is required and whether the two parties that are the IRS auditors and the selected taxpayers available at the schedule place and time.
