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Information on Tax Examinations

General Examination Procedures

The Internal Revenue Service (IRS) examines tax returns to verify the correctness of income, deductions, exemptions, and credits. The IRS uses a computer program called the Discriminant Function System to score most tax returns for probability of errors The IRS screens and selects for examination those returns with high probability of errors.

We send you a letter if we select your return for examination. If your letter shows an interview scheduled that you cannot keep, please call us to reschedule your interview as soon as possible. If your letter doesn't include a prescheduled interview, you will have ten days to schedule a convenient time for your interview. Please review your calendar in order to avoid rescheduled interviews. It is to your advantage to substantiate the items under examination as soon as possible.

To prepare for your interview, review your tax return and organize the requested records before meeting with the examiner. This will minimize the time needed for the examination and maximize the accuracy of the results. If you don't appear for your interview, the examiner will correct your tax based on available information, and may send you an examination report showing the proposed changes and additional tax.

Generally, we identify specific items for examination, but the examiner is responsible for the entire return and can raise additional issues. You also may raise any other relevant issues, as well as, bring records to substantiate items you overlooked when you originally filed your return.

Our goal is to conclude examinations as soon as possible. However, the examiner may need to research an item in question, or secure and review additional documentation after your initial interview. If at any time you have a question or concern about the status of your examination, please feel free to call the examiner or the group manager. When all records have been reviewed, the examiner may accept your return as filed, or recommend an increase or decrease in the amount of tax you owe. We will notify you of the results.

Repetitive Examinations

The examiner tries to identify any repetitive examinations. Please notify the person identified in the heading of your letter, if all three of the following conditions apply to you:

• We examined your return for one of the last two tax years,
• We accepted your return as filed, and
• The items now identified for examination are the same as those previously examined.

Future years: If we make no changes to your return currently under examination (audit), keep the following items:

• The enclosed audit notification letter,
• The no change letter (L-590) we will send, and
• Your tax return.

If we select either one of the following two year's returns for audit, the information you keep about your current examination will help us to reduce repetitive audits.

Authorized Representation

You may always have someone accompany you to your interview, or send an authorized representative on your behalf. Use Form 2848, Power of Attorney, for this purpose. You can ask for this form in writing or by calling 1800-TAX-FORM.

Rights of Appeal

After reviewing your records, the examiner may propose a tax change. If you agree, the examiner will prepare a report of adjustments and request your signed consent. If you do not agree, you can request the examiner's supervisor to informally review your case.

If you cannot reach an agreement, you may request a regional appeals officer to consider your case. The appeals office is independent of the district office. If you decide to bypass Appeals and petition the United States Tax Court, the case will normally be assigned for settlement to an appeals officer before the Tax Court hears your case. The examiner will explain this procedure to you, as well as your appeal rights in the court system outside of the Internal Revenue Service. You can request Publication 556, Examination of Returns, Appeal Rights, and Claims for Refund, that explains the examination process and appeal rights in more detail.

Your Comments on IRS Enforcement Actions

Congress established the Small Business and Agriculture Regulatory Enforcement Ombudsman and 10 Regional Fairness Boards to receive comments from small businesses about federal agency enforcement actions. The Ombudsman will annually evaluate the enforcement activities and rate each agency's responsiveness to small businesses. If you wish to comment on the enforcement actions of IRS, call:
1-888-REGFAIR (1-888-734-3247)

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