The Examination Process The IRS Mission

1 Provide America staxpayers topquality service byhelping themunderstand andmeet their taxresponsibilitiesand by applyingthe tax law withintegrity andfairness to Examination ProcessIntroductionThe Internal Revenue Service (IRS) accepts most federalreturns as filed. Some returns, however, are examined, oraudited, to determine if income, expenses, and credits arereported publication discusses general rules and procedureswe follow in examinations. It explains what happens before,during, and after an Examination . It also explains appeal andpayment a taxpayer, you have the right to fair, professional,prompt, and courteous service from IRS employees, asoutlined in the Declaration of Taxpayer Rights found onpage must follow the tax rules set forth by Congress in theInternal Revenue Code. We also follow TreasuryRegulations, court decisions, and other rules andprocedures written to administer the tax the Examination results in a change to your tax liability,you may ask us to reconsider your case.

2 Some reasons whywe may reconsider your case include:You are submitting additional information that couldresult in a change to the additional amount we havedetermined that you owe;You are filing an original delinquent return after we havedetermined that you owe an additional amount, or;You are identifying a mathematical or processing errorwe must request reconsideration in writing and submit it toyour local IRS IRS Mission Publication 3498 (Rev. 11-2004) Catalog Number 73074S What s Inside ..IntroductionDeclaration of Taxpayer RightsWhat To Do if You Agree or Disagreewith the Examination ResultsIf You AgreeIf You Do Not AgreeFast Track Mediation Services 333445555666Do you have questions or need helpright away? Call us. We are here tohelp tax forms and publications:1-800-829-36761-800-829-405 9 /TDD1-703-368-9694-Forms by FaxFor tax information and help:Call the number on the bill youreceived or call us toll free at:1-800-829-1040 (for 1040 filers)1-800-829-4933 (for business filers)1-800-829-4059 /TDD?

3 For General Information:For information about a specific Examination pleasecontact the person named on the appointment to Do When You Receive a Billfrom the IRS After the ExaminationPayment OptionsTemporarily Delay theCollection ProcessInnocent Spouse ReliefYou Must Contact UsWhat If You Believe your Bill Is Wrong How Do You Appeal a Decision?The Appeal SystemAppeal Within the IRSM aking a Small Case RequestFiling a Formal Protest Internet: - ll find answers to frequently askedtax questions, tax forms on-line,searchable publications, hot taxissues, news, and help through may also visit your nearest IRS ll find the exact address in your localphone book under GovernmentIf you prefer to write to us.

4 Enclose a copy of your tax bill. Printyour name, social security number ortaxpayer identification number, and thetax form and period shown on your to us at the address shown onyour tax Return Is Going To Be ExaminedBefore the ExaminationDuring the ExaminationExaminations by MailExaminations in PersonHow to Stop Interest from AccumulatingConsents to Extend the Statute ofLimitationsResults of the Examination 333 4 6777888 Privacy Act Statement843 your Return Is Going To of Taxpayer RightsBefore the ExaminationWe accept most taxpayers returns as filed. If we inquire about your returnor select it for Examination , it does not suggest that you are dishonest. Theinquiry or Examination may or may not result in more tax. We may closeyour case without change or you may receive a Process of selecting a return for Examination usually begins in one oftwo ways.

5 One way is to use computer programs to identify returns thatmay have incorrect amounts. The programs may be based on informationreturns, such as Forms 1099 or W-2, on studies of past examinations, oron certain issues identified by other special projects. Another way is to useinformation from compliance projects that indicates a return may haveincorrect amounts. These sources may include newspapers, publicrecords, and individuals. If we determine the information is accurate andreliable, we may use it to select a return for 556, Examination of Returns, Appeal Rights, and Claims forRefund, explains the rules and procedures that we follow in following sections give an overview of how we conduct the ExaminationExaminations by MailIf the Examination is conducted by mail, you on your own behalf. (In the case of a jointly filed return,either spouse can respond or both spouses can send ajoint response.)

6 Someone represent you in correspondence with us. Thisperson must be an attorney, accountant, enrolled agent, anenrolled actuary, or the person who prepared the return andsigned it as the preparer. If you choose to have someonerepresent you, you must furnish us with written this authorization on Form 2848, Power of Attorney andDeclaration of examinations are conducted entirely by mail. If the examinationis conducted by mail, you ll receive a letter from us asking foradditional information about certain items shown on your return, suchas income, expenses, and itemized in PersonAn Examination conducted in person begins when we notify you thatyour return has been selected. We will tell you what information you need to provide at that time. If you gather the information before theexamination, we may be able to complete it more easily and in ashorter the Examination is conducted in person, it can take place inyour home, your place of business, an IRS office, or the office ofyour attorney, accountant, or enrolled agent (a person enrolled topractice before the IRS).

7 If the time or place is not convenient foryou, the examiner will try to work out something more : You may obtain any of the forms and publicationsreferenced in this publication by calling Appeals and Judicial ReviewIf you disagree with us about the amount of your taxliability or certain collection actions, you have the right toask the Appeals Office to review your case. You may alsoask a court to review your Protection of your RightsIRS employees will explain and protect your rights as a taxpayerthroughout your contact with Privacy and ConfidentialityThe IRS will not disclose to anyone the information you give us,except as authorized by law. You have the right to know why we areasking you for information, how we will use it, and what happens ifyou do not provide requested Professional and Courteous ServiceIf you believe that an IRS employee has not treated you in aprofessional, fair, and courteous manner, you should tell thatemployee s supervisor.

8 If the supervisor s response is notsatisfactory, you should write to the IRS Director for your Area orthe Center where you file your RepresentationYou may either represent yourself or, with proper written authoriza-tion, have someone else represent you. your representative mustbe a person allowed to practice before the IRS, such as an attorney,certified public accountant, or enrolled agent (a person enrolled topractice before the IRS). If you are in an interview and ask toconsult such a person, then we must stop and reschedule theinterview in most can have someone accompany you at an interview. You maymake sound recordings of any meetings with our Examination ,appeal, or collection personnel, provided you tell us in writing 10days before the Payment of Only the Correct Amount of TaxYou are responsible for paying only the correct amount of tax dueunder the law no more, no less.

9 If you cannot pay all of your taxwhen it is due, you may be able to make monthly Help with Unresolved Tax ProblemsThe Taxpayer Advocate Service can help you if you have triedunsuccessfully to resolve a problem with the IRS. your localTaxpayer Advocate can offer you special help if you have asignificant hardship as a result of a tax problem. For moreinformation, call toll-free, 1-877-777-4778 (1-800-829-4059 forTTY/TDD) or write to the Taxpayer Advocate at the IRS officethat last contacted Relief from Certain Penalties and InterestThe IRS will waive penalties when allowed by law if you can showyou acted reasonably and in good faith or relied on the incorrectadvice of an IRS employee. We will waive interest that is theresult of certain errors or delays caused by an IRS Return Is Going To Be Examined. (cont.)If the Examination is conducted in person, you on your own behalf.

10 (In the case of a jointly filed return,either spouse or both can attend the interview.) If you areacting on your own behalf, you may leave to consult with yourrepresentative. We will suspend the interview and reschedulethe Examination . We cannot suspend the interview if we areconducting it as a result of your receiving an administrativesummons. someone accompany you, either to support your positionor to witness to the someone who will represent you. This personmust be an attorney, accountant, enrolled agent, an enrolledactuary, or the person who prepared the return and signed it asthe your representative act for you and not be present at theaudit yourself. If you choose to have someone represent youin your absence, you must furnish us with written this authorization on Form 2848, Power of Attorney andDeclaration of your Examination , if you think you will owe additional tax atthe end of the Examination , you can stop interest from accumulatingby paying all or part of the amount you think you will owe.