PDF document

- 1 -

                                                                                        Publication 3498-A

The Examination Process (Audits by Mail)

This publication will guide you through the audit process and explain your responsibilities and rights during 
and after an audit. While most returns are accepted as filed, some are selected for audit to determine if 
income, expenses, and/or credits are being reported accurately.

If you have questions or need help
Please visit www.irs.gov/formspubs/ to find all the IRS tax forms and publications mentioned here, or to 
do a keyword search on any topic.
You can also visit your local IRS office, or call the number on the letter you received.  If you don’t have a 
letter, please call:
•  1-800-829-1040 (individuals)
•  1-800-829-4933 (businesses)

Your Rights as a Taxpayer                                                                                                 2
Privacy Act Statement                                                                                                     2
Audits by Mail                                                                                                            3
Steps in the Audit Process                                                                                                4
Step 1—Review, Gather, and Compare Information                                                                            4
Step 2—Reply to the Letter                                                                                                4
Step 3—Resolve Disagreements                                                                                              4
The Appeals Process                                                                                                       5
How to Appeal a Decision                                                                                                  5
Appeals Requests                                                                                                          5
What to Expect After You Request an Appeals Conference                                                                    5
U.S. Tax Court                                                                                                            5
Frequently Asked Questions                                                                                                6
What to Do When You Receive a Bill                                                                                        7
Payment Options                                                                                                           7
General Information                                                                                                       8
Getting Help                                                                                                              8

Publication 3498-A (Rev. 5-2021)  Catalog Number 38850E  Department of the Treasury  Internal Revenue Service  www.irs.gov

- 2 -

2 Publication 3498-A

Your Rights As a Taxpayer Privacy Act Statement
Some of your most important rights as a taxpayer are listed The Privacy Act of 1974 says that when we ask you for
below: information, we must first tell you our legal right to ask for the
information, why we are asking for it, and how it will be used.
Protection of Your Rights We must also tell you what could happen if you do not provide
it and whether or not you must respond under the law.
IRS employees will explain and protect your rights as a
taxpayer throughout your contact with us. This notice applies to tax returns and any papers filed with
them. It also applies to any questions we need to ask you so
Privacy and Confidentiality we can complete, correct, or process your return; figure your
The IRS will not disclose to anyone the information you give tax; and collect tax, interest, or penalties.
us, except as authorized by law. You have the right to know
why we are asking you for information, how we will use it, and Our legal right to ask for information is found in Internal
what happens if you do not provide requested information. Revenue Code sections 6001, 6011, and 6012(a), and their
regulations. They say that you must file a return or statement
Professional and Courteous Service with us for any tax you are liable for. Your response is
mandatory under these sections.
If you believe that an IRS employee has not treated you in a
professional, fair, and courteous manner, you should tell that Code section 6109 and its regulations say that you must
employee’s supervisor. If the supervisor’s response is not show your social security number or individual taxpayer
satisfactory, you should write to the IRS Director for your Area identification number on what you file. You must also fill in all
or the Campus where you file your return. parts of the tax form that apply to you. This is so we know
who you are, and can process your return and papers. You
Representation do not have to check the boxes for the Presidential Election
You may either represent yourself or, with proper written Campaign Fund.
authorization, have someone else represent you. Your We ask for tax return information to carry out the U.S. tax
representative must be a person allowed to practice before laws. We need it to figure and collect the right amount of tax.
the IRS, such as an attorney, certified public accountant, or
enrolled agent (a person enrolled to practice before the IRS). If We may give the information to the Department of Justice
you are in an interview and ask to consult such a person, then and to other federal agencies, as provided by law. We may
we must stop and reschedule the interview in most cases. also give it to cities, states, the District of Columbia, and U.S.
commonwealths or possessions to carry out their tax laws.
Payment of Only the Correct Amount of Tax
You are responsible for paying only the correct amount of tax We may give it to certain foreign governments under tax
due under the law—no more, no less. If you cannot pay all treaties they have with the United States. We may also
of your tax when it is due, you may be able to make monthly disclose this information to federal, state, or local agencies
payments. that investigate or respond to acts or threats of terrorism
or participate in intelligence or counterintelligence activities
Help with Unresolved Tax Problems and concerning terrorism.
Hardships If you do not file a return, do not give us the information we
The Taxpayer Advocate Service can help you if you tried ask for, or provide fraudulent information, the law says that we
unsuccessfully to resolve a problem with the IRS. Your local may charge you penalties and in certain cases, subject you to
Taxpayer Advocate can offer you special help if you have a criminal prosecution. We may also disallow the exemptions,
significant hardship as a result of a tax problem. For more exclusions, credits, deductions, or adjustments shown on
information, call toll free 1-877-777-4778 (1-800-829-4059 for your tax return. This could make your tax higher or delay any
TTY/TDD) or write to the Taxpayer Advocate at the IRS office refund. Interest may also be charged.
that last contacted you.
Please keep this notice with your records. You may want
to refer to it if we ask you for other information. If you have
Appeals and Judicial Review
questions about the rules for filing and giving information,
If you disagree with us about the amount of your tax liability please call or visit any Internal Revenue Service office.
or certain collection actions, you have the right to ask the
Appeals Office to review your case. You may also ask a court
to review your case.

Relief from Certain Penalties and Interest
The IRS will waive penalties when allowed by law if you can
show you acted reasonably and in good faith or relied on the
incorrect advice of an IRS employee. We will waive interest
that is the result of certain errors or delays caused by an IRS
employee. You must request a waiver of penalties and interest
in writing.

- 3 -

                                              3                                Publication 3498-A

Audits by Mail

                             The IRS will send a letter informing you that you 
                             have been selected for an audit, and listing what information 
                             you need to send to the IRS.
                     1

                             Read the letter and follow the instructions.
                             Submit all documentation requested by the due date. If you 
                             do not understand, call the number on the letter.
                     2

                             The IRS will review your documentation.
                             If more information is needed, the IRS will contact you.

                     3

Once the review is complete, the IRS will respond:

                                    The IRS may propose an adjustment to your return.
The IRS may accept your 
original tax return as filed 
and send you a letter.
                             If you have submitted all of your    If you agree with the proposed 
You’re done!                 documentation and do not agree       adjustment, sign and return the 
                             with the proposed adjustment,        enclosed form by the due date.
                             you can request a telephone 
                             conference with an examiner. If      You’re done!
                             you still cannot reach an agreement 
                             after talking with the examiner you 
                             have options:

                             You can request    You can request 
                             a conference       that your case be 
                             with a manager     sent to Appeals

Don’t Forget!
                             If you agree with the  If an agreement is not reached or you do not 
If you do not respond        decision reached       respond, the IRS will send you a Statutory 
to a notice or request,      during a conference or Notice of Deficiency by certified mail. You 
additional tax could be      in Appeals, sign and   have 90 days from the date on the notice to 
assessed.                    return the report by   petition the U.S. Tax Court without paying the 
                             the due date.          tax. You many continue to work with us to 
For more information                                resolve your tax matter, but we cannot extend 
about petitioning U.S.       You’re done!           the time you have to petition the U.S. Tax Court 
Tax Court, see page 5 of                            beyond the original 90 days. If an agreement 
Publication 3498-A or visit                         is not reached and you do not petition the U.S. 
www.ustaxcourt.gov                                  Tax Court, the tax will be assessed.

- 4 -

4 Publication 3498-A

Steps in the Audit Process
Step 1 – Review, Gather, and Compare If You Agree with the Proposed Changes
Information If the letter you received shows that you owe tax, do the
Review the letter and attachments for the necessary following:
information that you need to gather. Compare the proposed
changes to your tax return. If you have questions after your 1. Sign the agreement page of the letter.
review, you may do the following: 2. Pay any additional tax, penalties, and interest you may
owe. (See the Payment Options section of this publication
• Call the number on your letter. for available payment methods.)
• Write to the IRS at the address shown on the letter. 3. Return the signed agreement, and your payment, if paying
• Visit your local Taxpayer Assistance Center or Low Income by check or money order, to the address shown on the
Taxpayer Clinic (refer to www.irs.gov for locations or see letter.
page 8 of this publication for additional information).
Note: If you do not pay the additional tax and interest, you will
• Obtain professional assistance (Attorney, Certified Public receive a bill. For additional payment information, please refer
Accountant, or Enrolled Agent). to Publication 594, The IRS Collection Process.
Step 2 – Reply to the Letter If the letter you received shows that you are due a refund, do
the following:
You should reply by the deadline given in the letter. If you are
unable to meet the deadline, please call the number on the 1. Sign the agreement page of the letter, and
letter to discuss your situation and/or request additional time.
2. Return the agreement page to the address on the letter.
How to Submit Documentation
You can expect your refund within 6 to 8 weeks, if applicable,
The letter may ask you to send in documentation to support provided you do not have any unpaid tax obligations or other
items claimed on your tax return. Attach photocopies of your legal debts IRS is required to collect.
original documents to the letter and send to the address
provided or fax to the number provided. Please do not send If You Do Not Agree with the Proposed Changes
original documents.
1. Do not sign the agreement page of the letter if you
If you are unable to provide verification of an amount claimed, disagree or plan to appeal.
provide an explanation of the issue and how the amount was 2. Send us documentation and an explanation to support
determined. your position.

If you are unable to provide the necessary information by fax If We Don’t Hear from You
or mail due to a substantial volume of documentation, call the
number listed on the letter for assistance. You may be asked If you do not reply by the due date, the IRS will disallow
to provide an itemized list of the expenses or deductions in the items identified. This may delay or reduce any refund, if
question. applicable. Interest will continue to accrue on any balance
due. You could miss your timeframe to resolve your dispute.
Note: If you are faxing your documents, please include your
name and social security number on each page you fax. This Step 3 – Resolve Disagreements
is to ensure all pages are associated with your case. If you disagree with the examiner’s decision after you’ve sent
in all requested documentation to support your position, you
Reminder! Be sure to respond by the deadline given in the
have options to resolve your disagreements:
letter.
• Request an informal conference with the examiner’s
If we accept your documentation, we will send you a letter
manager prior to the date given in the letter,
stating we accept your return as filed. You should keep this
letter with your tax records. • Request an Appeals conference prior to the date given in
the letter,
If we do not accept your documentation, we will send you
• Petition Tax Court after you receive the Statutory Notice of
a letter explaining any proposed changes to your tax return. If
Deficiency
you have questions, see the contact information listed in Step
1 on this page. Note: Interest will continue to accrue on all unpaid balances
until the disagreement is resolved. You can stop interest by
Once you review the proposed changes, decide if you agree
paying the entire amount of proposed tax, penalties, and
or disagree.
interest. There are two types of payments that stop interest on
proposed liabilities - a “deposit” and an “advance payment” of
tax. You need to decide which type is right for you. Payment
instructions are in the letter sent with the proposed changes
report.

- 5 -

5 Publication 3498-A

The Appeals Process
People sometimes disagree on tax matters. The IRS has an You or your qualified representative should be prepared
appeals process to resolve tax issues, without going to court, to discuss all disputed issues at the conference. Most
and most disputes are considered and resolved informally and differences are settled at this level. Only attorneys, certified
promptly. The Appeals Office is separate and independent public accountants, or enrolled agents are allowed to
from the IRS office that is auditing your return. However, if you represent a taxpayer at the Appeals conference. An unenrolled
do not want to appeal, or you appealed and disagree with the preparer may be a witness during the conference, but not a
Appeals determination, you may have the right to take your representative.
case to court.
U.S. Tax Court
How to Appeal a Decision
Once the IRS or Appeals sends you a Statutory Notice of
You must tell the IRS if you disagree with the proposed Deficiency containing Tax Court rights, you can then file a
changes and you want to appeal. Send the written request petition with the U.S. Tax Court to review the determination.
to the address on the letter within the timeframe given. To
appeal a decision, your reasons for disagreeing must be within Note: Tax Court is generally a “prepayment” forum, which
the scope of the tax laws. For example, you cannot appeal means you can petition Tax Court before an assessment or
your case based on moral, religious, political, constitutional, payment is made.
conscientious, or similar grounds.
A case petitioned to the U.S. Tax Court will normally be
Note: All information to support your position should have considered for settlement by an Appeals Office before the Tax
been provided to the examiner during the audit. If you provide Court hears the case. You must file your petition within the
substantial additional documentation after the audit, your case timeframe specified in the letter (usually 90 days).There is a
will be sent back to the examiner for consideration. filing fee, but the fee may be waived if you qualify.
Reminder! Call the number on the letter to address your Note: The law sets the time you are allowed to file your
concerns before beginning the appeals process. petition; the IRS cannot change the time period. You have
only the timeframe specified to petition the Court even if you
Appeals Requests continue to talk to IRS examiners or Appeals.
When you request an appeals conference, you may also need In addition to its regular procedures for filing a petition, the
to file a formal written protest or a small case request with U.S. Tax Court has simplified procedures for small cases if
the office named on our letter to you. Refer to Publication your dispute is $50,000 or less for any tax year.
5, Your Appeal Rights and How to Prepare a Protest if You
Don’t Agree, if the amount you want to appeal is greater than To use the simplified procedures, the total amount of tax,
$25,000. interest, and penalties, including accrued but unassessed
interest and penalties for each tax year must not exceed
Small Case Request ($25,000 or less) $50,000, calculated as of the date the petition is filed.
If the amount you want to appeal is $25,000 or less in
proposed change in tax, penalties, and interest for each tax Note: If you use the simplified procedure, you cannot appeal
period, you can: the Tax Court’s decision.
• Use Form 12203, Request for Appeals Review, available on You can get information about regular and simplified
www.irs.gov, or by calling 1-800-829-3676, or procedures and other matters at the Tax Court’s web site
www.ustaxcourt.gov or by writing to:
• Send in a brief written statement requesting an Appeal.
Indicate the changes you do not agree with and why you Clerk of the U.S. Tax Court
do not agree with them. 400 Second St NW
Washington, DC 20217
What to Expect After You Request an Appeals
Conference District Court and the Court of Federal Claims
Once the IRS receives your request for an appeals conference, You may take your case to your U.S. District Court or the U.S.
the examiner will forward your case to Appeals. Appeals will Court of Federal Claims, but generally only after you have paid
contact you to arrange a conference. the tax and filed a claim for refund with the IRS. You can get
information about procedures for filing suit in either court on
Appeals will usually conduct the conference with you their web sites or by contacting the clerk of the court nearest
and/or your authorized representative by telephone or you. You can find the address and telephone number in the
correspondence, but may consider your request for a face- government section (blue pages) of your local telephone book.
to-face conference if your case involves complex issues. To
discuss whether a face-to-face conference might be better for • District Court www.uscourts.gov
you, call the number provided on the initial contact letter you • Court of Federal Claims www.cofc.uscourts.gov
received from Appeals.

- 6 -

6 Publication 3498-A

Frequently Asked Questions
1. How long does the audit process take? 7. What if my spouse’s actions led to the proposed changes
The length of an audit varies and depends on many in our taxes and I wasn’t aware of his/her actions?
factors, including the type of audit. You can help the You could be considered what IRS refers to as an Innocent
process go faster by responding on time with all the Spouse. If you filed a joint tax return, you are jointly
documents we request. Once you have replied and and individually responsible for the tax and any interest
provided all your documentation, the IRS will review what and penalty due on the joint return. This is true even
you submitted. If additional time is needed to complete if a divorce decree states that a former spouse will be
your audit, you will be notified by mail. responsible for any amounts due on a previously filed joint
return.
Audits in which all requested documentation or a signed
agreement is received can be closed quickly. Other types In some cases, a spouse may be relieved of the tax,
can take several months. interest, and penalties on a joint return. Four types of relief
are available:
2. How do I know if you received the requested information
I submitted? • Innocent spouse relief
The IRS will send you a letter within 30 days • Separation of liability
acknowledging receipt of documents you submitted to us • Equitable relief
by mail or fax.
• Relief from liability arising from community property law
3. I received a letter stating I was being audited. Can I You must file Form 8857, Request for Innocent Spouse
speak to the examiner assigned my case? Relief. Publication 971, Innocent Spouse Relief, explains
Call the number on the letter you received and the each type of relief, who qualifies, and how to request relief.
examiner who answers your call should be able to provide
immediate assistance and answer questions regarding 8. What if my tax accounts were affected by Identity Theft?
your audit. If it is necessary to speak to your examiner, you Identity Theft occurs when someone uses your personal
can request a call back from that examiner. information such as your name, Social Security number
and other identifying information without your consent.
4. Can I request a face-to-face interview? If you receive a letter from the IRS and you suspect your
Although you can request a face-to-face interview, we identity has been stolen, respond immediately to the
are usually able to resolve most cases by telephone or address, phone or fax number provided on the IRS letter.
correspondence. Face-to-face conferences may be You will need to submit the following documentation to
appropriate for complex issues or cases with substantial prove your identity theft claim:
documentation. You can call to discuss a face-to-face, and
if your audit warrants one, your request must be in writing • Authentication of Identity – A copy of a valid U.S.
and explain why it is necessary. federal or state government issued form of identification
(examples include a driver’s license, state identification
5. I was due a refund. When will I get it? card, social security card or passport), and
If we determine that you are still due a refund after the • Evidence of Identity Theft – A copy of a police report
audit is complete, you can expect to receive your refund in or a completed and signed Form 14039, Identity Theft
6 to 8 weeks. Affidavit.
6. Will the IRS contact anyone other than my representative
or me during the audit?
Generally, the IRS will deal directly with you or your
authorized representative. However, we sometimes talk
with other persons if we need information that you have
been unable to provide, or to verify information we have
received. If we do contact other persons, such as a
neighbor, bank, employer, or employees, we generally
need to tell them limited information, such as your name.
The law prohibits us from disclosing any more information
than is necessary to obtain or verify the information we are
seeking. Our need to contact other persons may continue
as long as there is activity in your case. If we do contact
other persons, you have a right to request a list of those
contacted. Call the number on the letter you received if you
need more information.

- 7 -

7 Publication 3498-A

What to Do When You Receive a Bill
You will receive a tax bill if you have not paid your taxes in full There are several ways to apply for an installment agreement:
when IRS requests payment. If you pay your bill in full, you
reduce the amount of interest and penalty you owe. If you • Apply online at www.irs.gov if you owe $50,000 or less in
can’t pay your tax bill right away, pay as much as you can and combined individual income tax, penalties and interest;
contact us immediately to explain your situation. We will help • By phone – Call the number on your letter or 1-800-829-
you work out a payment plan. For assistance with a payment 1040;
plan, do one of the following:
• By Mail – Complete and mail Form 9465, Installment
• Visit www.irs.gov/Payments Agreement Request. If you owe more than $50,000,
you will also need to complete Form 433-F, Collection
• Call the number listed on your bill. Information Statement;
• Write to us at the address on your bill. • In Person at your local IRS office
• Visit your local IRS office.
• See Publication 594, The IRS Collection Process Apply for an Offer in Compromise
You may be eligible for an Offer in Compromise (OIC) if you
Payment Options – Pay the full amount now can’t pay the amount you owe in full or through installments.
By requesting an OIC, you’re asking to settle unpaid taxes for
Pay with your Credit or Debit Card less than the full amount you owe.
For a fee, you can pay by credit or debit card using an
electronic payment service provider. For more information on For an OIC to be considered, you must pay an application fee
making a payment using a credit or debit card, visit https:// and make an initial or periodic payment. However, low income
www.irs.gov/payments/pay-your-taxes-by-debit-or-credit- taxpayers may qualify for a waiver of the application fee and
card. initial or periodic payment.
Pay with Electronic Funds Transfer For more information, see Form 656, Offer in Compromise,
and Form 656-B, Offer in Compromise (Booklet).
For a convenient, secure way to pay, you can use the
Electronic Federal Tax Payment System (EFTPS). To enroll, Ask that we delay collection
visit www.eftps.com or call 1-800-555-4477. For more
information, see Publication 966, Electronic Choices to Pay All If you can’t pay any of the amount due, you can request that
Your Federal Taxes. we delay collection until you’re able to pay. Prior to approving
your request, we may ask you to complete a Collection
Pay by mail or in person at a local IRS office Information Statement and provide proof of your financial
status. You should know that if we delay collection, we’ll still
You can mail a check to us at the address listed on your bill or charge applicable penalties and interest until you pay the full
bring it to your local IRS office. Make your check, money order amount. We may request updated financial information during
or cashier’s check payable to the United States Treasury. Write this temporary delay to review your ability to pay. A Notice of
the tax year, your Social Security Number and phone number Federal Tax Lien may also be filed to protect the government’s
on your form of payment. For a listing of offices near you, interest in your assets. For more information, see Publication
please visit https://www.irs.gov/help/contact-your-local- 594, The IRS Collection Process.
irs-office.
Appeal the Collection Decision
Apply for an Installment Agreement
You may also appeal the collection decision made by the IRS.
An installment agreement allows you to pay your debt in For Appeal consideration of liens, levies, seizures, installment
smaller, periodic payments if you can’t pay the full balance at agreements or Offers in Compromise, see Publication 1660,
once. We base the amount and number of your installment Collection Appeal Rights.
payments on the amount you owe and your ability to pay
that amount within the time we can legally collect payments
from you. You should be aware, however, that an installment
agreement is more costly than paying all the taxes you owe
now. Penalties and interest will continue to accumulate on the
unpaid balance.
Another cost associated with an installment agreement is a
user fee. We charge this fee to set up the agreement. If you
meet our low-income guidelines, you can pay a reduced user
fee. For more information, see Form 13844, Application for
Reduced User Fee for Installment Agreements.

- 8 -

8 Publication 3498-A

General Information
We have provided several options for you to get general Internet: www.irs.gov
information or assistance. For information about a specific
examination report, please call the number on the report or You will find answers to frequently asked tax questions; tax
letter. forms online, searchable publications, hot tax issues, and
news.
For tax information and help:
If you prefer to write to us:
Call the number on the letter or bill you received or call us toll
free at: Enclose a copy of your letter or tax bill. Print your name, social
security number or taxpayer identification number, and the tax
• 1-800-829-1040 (for 1040 filers) form and period shown on your letter or bill. Write to us at the
address shown on your letter or tax bill.
• 1-800-829-4933 (for business filers)
• 1-800-829-4059 TTY/TTD You may also visit your nearest IRS Office:
For tax forms and publications: You will find the exact address in your local phone book under
U.S. Government or at https://www.irs.gov/help/contact-
• 1-800-TAX-FORM (1-800-829-3676) your-local-irs-office.
• 1-800-829-4059 TTY/TTD

Getting Help
The Taxpayer Advocate Service Is Here to Help How can you reach us?
You If you think TAS can help you, call your local advocate, whose
What is the Taxpayer Advocate Service? number is in your phone book and on our website at https://
www.irs.gov/taxpayer-advocate. You can also call us toll-
The Taxpayer Advocate Service (TAS) is your voice at the IRS. free at 1-877-777-4778; for TTY/TDD 1-800-829-4059.
Our job is to ensure that every taxpayer is treated fairly and
that you know and understand your rights. Low Income Taxpayer Clinics
What can TAS do for you? Low Income Taxpayer Clinics (LITCs) are independent from
the IRS. LITCs serve individuals whose income is below a
We can offer you free help with IRS problems that you can’t certain level and who need to resolve a tax problem. Most
resolve on your own. We know this process can be confusing, clinics provide professional representation before the IRS
but the worst thing you can do is nothing at all! TAS can help if or in court on audits, appeals, tax collection disputes, and
you can’t resolve your tax problem and: other issues for free or for a small fee. Some clinics provide
information about taxpayer rights and responsibilities in many
• Your problem is causing financial difficulties for you, your different languages for individuals who speak English as a
family, or your business. second language. To get more information or find a clinic near
• You face (or your business is facing) an immediate threat of you, check the LITC page at https://www.irs.gov/advocate/
adverse action. low-income-taxpayer-clinics or IRS Publication 4134, Low
Income Taxpayer Clinic List. You can also get this publication
• You’ve tried repeatedly to contact the IRS but no one
at your local IRS office or by calling 1-800-829-3676.
has responded, or the IRS hasn’t responded by the date
promised.
If you qualify for our help, you’ll be assigned to one advocate
who’ll be with you at every turn and will do everything possible
to resolve your problem.
• TAS is an independent organization within the IRS. Our
advocates know how to work with the IRS to get your
problems resolved.
• Our services are free and tailored to meet your needs.
• We have offices in every state, the District of Columbia,
and Puerto Rico.
• Our tax toolkit at www.TaxpayerAdvocate.irs.gov can
help you understand your rights, which the IRS must abide
by in dealing with you.

PDF file checksum: 3967469615

(Plugin #1/9.12/13.0)