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Timelines on correspondence audits: IRS often misses the mark

On Behalf of | Jul 7, 2014 | Tax Controversies

This is a follow-up to a post we did last winter on correspondence audits.

The term “tax audit” is often associated with face-to-face audits. As we noted in our March 5 post, however, correspondence audits – also known on “corr-exams,” are a commonly used procedure in which taxpayers respond to IRS inquiries by mail.

In this post, we will take note of a recent government report that found concerns with how the IRS manages the flow of documents it receives through these audits.

The report was prepared by the Government Accountability Office (GAO). It found that notices that the IRS sends to taxpayers during the correspondence audit process have failed to provide taxpayers with a realistic expectation of when the agency would respond to the information sent in by taxpayers.

For instance, a notice will typically say that the IRS will replay within 30 to 45 days to a taxpayer who submits information in a correspondence audit. In practice, however, it often takes the agency at least twice that long to do so.

Of course, “often” is an indefinite word. But the GAO report quantified just how often the IRS has missed the mark on its promises of response time in corr-exams.

The GAO found that more than half the time, the IRS has failed to get back to taxpayers in a timely manner that would fit with the expectations its own notices have created.

Source: Accounting Today, “IRS Prodded to Manage Correspondence Audits Better,” Michael Cohn, July 7, 2014

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