Ignoring an IRS audit notice can result in an assessment of additional tax, penalties, and interest. If you continue to ignore subsequent IRS notices, you may lose your right to dispute the case in Tax Court, and the IRS can begin trying to collect the tax.
Regardless of the issues on your return, you will be better off consulting with tax audit defense attorney and responding appropriately to the IRS audit request.
Types of Audits
The IRS uses mail audits, office audits, and field audits. Most audits are done by mail.
The IRS is typically auditing your return because of a few specific issues. They may have received a W-2 or 1099 that isn’t reported on your return, or they may want proof of an unusual deduction you’ve claimed.
The IRS audit notice will include a deadline to respond. If you ignore this notice, the IRS can decide all of the issues against you.
Notice of Deficiency
As an example, the IRS may include additional income on your return and disallow some of your deductions. Your taxable income will increase and so will your tax liability.
The IRS will then send you a Notice of Deficiency informing you of the assessment of the additional tax liability, along with penalties and interest.
At this point, you still have the option to dispute the tax without paying it ahead of time. You have 90 days to petition the U.S. Tax Court.
You won’t have to pay the tax until the Tax Court hears your case. At any point, you can decide to withdraw your petition if you wish.
However, if you don’t take action within 90 days, you lose the right to go to Tax Court. At that point, your only option for disputing the tax will be to pay the full amount and then request a refund.
The IRS then has six months to consider your request before you can go to court.
The IRS doesn’t need to receive your response in order to begin the collections process. You’ll keep receiving notices in the mail, which could inform you of the following impending collection actions:
- A Notice of Federal Tax Lien could be filed against your property.
- The funds in your bank account can be seized.
- A portion of your wages from each paycheck may be garnished.
- Your tax refund may be seized.
This process will continue until either the IRS has collected everything you owe or you work out a tax resolution of some sort.
Don’t ignore an IRS audit notice. Contact a tax attorney to get help responding to an audit notice and disputing a tax assessment.
Use our contact form to request a consultation with an Atlanta tax audit defense attorney at The Gartzman Law Firm.