How Long Does an IRS Audit Take? (2019 Update)
If you’ve ever heard the term “well-oiled machine,” then you should instantly know that the phrase was not in reference to the IRS and Audits.
The IRS (Internal Revenue Service), is the exact opposite of a well-oiled machine. The IRS is a tired, slow-moving, inefficient mess – and this will never be clearer to you than when you get an audit notice, and come to realize what is in store for you.
Common questions about audits, include:
- Who is going to audit me?
- Will the iRS come to my house?
- Can I go to jail?
- What if I say the “wrong thing?”
- Should I use an Attorney?
Audits are not so much “scary” (unless it is an eggshell or reverse eggshell audit) as much as long, tired nuisance.
The entire audit, from beginning-to-end, may take a few months – or even a few (or many) years.
How Long Does an IRS Audit Take?
The IRS Contacts You by Letter
The IRS may issue many different types of notices, depending on whether the audit is a correspondence audit (aka paper audit) or an in-person audit — in which you will either appear at the IRS Field Office, or they will visit you at work (usually when you own your own business).
The IRS Audit Notice is General
Under most circumstances, unless there is one isolated issue, the notice will be overbearing, and refer to a time period of usually 1-3 years.
This may vary.
You Receive an IDR (Information Document Request)
An IDR is a laundry list of issues the IRS wants to examine you for. It will request that you bring various different documents with you. And, they may want you to submit documentation prior to the audit (you may not always be legally required to).
The IDR can be one page, or 50-pages – depending on the issues you are being audited for.
You May Receive a Second, Third, etc. IDR
The IDR is not a one-shot deal. The IRS may send you numerous, sequential IDRs asking for additional documents.
You Respond to the Correspondence Audit
If it is a correspondence audit, then generally you submit the documentation and wait. The IRS may approve the submission, or ask for more information. These audits are less intrusive than the in-person audit. Generally, if you can succinctly summarize the issues, present them well and back it up with the requested documentation – it goes pretty smooth and is over relatively quick.
Meet In-Person Audit
You and your attorney appear and answer questions. (Please, do not go at it alone – if for no other reason, than to be sure you don’t incriminate yourself, and turn it into something bigger than it is.)
At the end of the audit, you may agree to the resolution. Usually you will not, and then the IRS Agent will take his or her time to review the document.
Then, you will receive more IDRs
Then, the IRS will come to a decision.
What if you Disagree with the IRS?
You may be able to abate the penalty with reasonable cause (usually before it is issued)
If you disagree, you can dispute the findings. You can file an CDP (Collection Due Process hearing), CAP (Collection Appeal Process).
If all else fails, you may consider Tax Court, District Court, or the Court of Claims.
How to try to Avoid the Audit?
If you have U.S. or foreign unreported income, assets, investments, or accounts – it is generally better to submit to an Amnesty Program, than it is to get audited, or hit with penalties, and then have to try to get them waived.
Beat the IRS to the Punch!
If you are out of compliance for not properly disclosing foreign income, accounts, assets, and/or investments — and are not under audit or examination — you may consider submitting to IRS Voluntary Disclosure (IRM, Streamlined or Reasonable Cause) in order to get into compliance.
What Type of Attorney Should I Hire?
IRS Voluntary Disclosure is a specialized area of law. An IRS Voluntary Disclosure is a complex undertaking. It requires the coordination of several moving parts, including strategy development, Tax Preparation, Legal Analysis, Negotiation and more.
You should hire a Tax Attorney who has the following credentials:
- ~20 Years of Private Practice experience representing his/her own clients
- Experienced in Criminal and Civil Tax Litigation
- Experienced representing clients in Eggshell and Reverse Eggshell Audits.
- Advanced Tax Degree (LL.M.)
- Preferably a Board-Certified Tax Law Specialist
We Specialize in Safely Disclosing Foreign Money
We have successfully handled a diverse range of IRS Voluntary Disclosure and International Tax Investigation/Examination cases involving FBAR, FATCA, and high-stakes matters for clients around the globe.
Golding & Golding, A PLC
We have successfully represented clients in more than 1,000 streamlined and voluntary disclosure submissions nationwide and in over 70-different countries.
We are the “go-to” firm for other Attorneys, CPAs, Enrolled Agents, Accountants, and Financial Professionals across the globe.
- Learn more about the Board Certified Tax Law Specialist credential
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Sean holds a Master's in Tax Law from one of the top Tax LL.M. programs in the country at the University of Denver. He has also earned the prestigious IRS Enrolled Agent credential. Mr. Golding's articles have been referenced in such publications as the Washington Post, Forbes, Nolo, and various Law Journals nationwide.