You maybe asking yourself “how long does an IRS Audit Take?”, Others may believe that audits can take years. In reality, the average audit timeframe is somewhere between.
The IRS audit process can take a few days to a couple of years, depending on which type you are selected for. Cases that lead to criminal prosecutions can take years.
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How Long Does a Tax Audit Take? Audit Lengths by Type
The Internal Revenue Service can conduct three different types of audits, with slightly different time frames.
Correspondence Audits
The completed audit date is within three to six weeks. This type of audit usually begins within seven months after filing your return.
Respond to the letter as soon as possible with accurate and complete information about the issue. You can ask for a 30-day extension if you need it.
Office Audits
The IRS conducts audits at the nearest IRS office. You or your IRS tax auditor representative meet with an IRS auditing officer and provide all relevant documentation. A taxpayer from the Shermans Oaks area, would report to the IRS Taxpayer Support Center located in Downtown California. Audits of the IRS office are typically initiated within a year after filing your return, and they are completed within three to six months.
An office audit can be triggered by:
- Information that is incomplete
- Discovering issues that could lead the IRS agent or auditor to increase the scope of an audit, or the number tax returns being scrutinized
Field Audits
Field audits are usually the most in-depth and complex types of audits. They usually begin within a year of filing your tax return and last about a year. The longer the IRS audit process takes, the more years that are being reviewed.
You have a greater chance of being chosen for a field inspection if you own a small company. Small businesses have less documentation to support the figures in their returns, such as W-2s or Form 1099s. They also deal with cash more often.
The length of IRS audits is affected by other factors
The above timelines are averages based on simple cases. There are a number of factors that can cause a tax audit to take longer than expected.
Small Business Audits
Audits of small businesses are usually lengthy and involve several tax years. Small businesses are under close scrutiny by the IRS to determine if they have overstated deductions or understated income.
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Pro Tip:
Ensure meticulous bookkeeping for small businesses as soon as you begin your business. This will make the audit process easier, since all the information the IRS auditor requires is right there. Consider investing in QuickBooks Training or outsourcing your small business accounting and bookkeeping to a professional.
Failure to Respond or Taking a Long Time to Respond to an IRS Audit Notice
The quicker an audit subject replies to an audit notice, the faster the agent assigned can review and decide on the response. If you fail to respond to a notice of audit, take a long time to respond, or provide incomplete information, the audit will automatically increase.
The IRS Agent Has a Large Caseload
A large number of cases, a medical or family emergency, or reassignment of the case to another auditor may also impact the auditor. These factors are mostly out of the control of an auditee, but staying informed on the progress of the auditor can be helpful.
If You Are Having Trouble Contacting the IRS
The use of call centers and automation can lead to audit subjects speaking with several IRS representatives. This will make the process longer. Request a direct number to your IRS auditor, and the supervisor in case they don’t answer.
There Are Many Adjustments to Be Made
If there are many adjustments required for your tax return, the audit process will take longer compared to a situation where only a few invoices were missing. The IRS agent needs to spend time searching for records that support your business and income expenses to reconcile numbers and decide if any additional adjustments are necessary for the tax return.
The Auditor Pursues Penalties
An IRS agent will assess penalties and interest if they find any errors on the tax return. Penalties include
- Failing to file
- Late filing
- Taxes owed not paid in full or on time
- Failing to declare all sources of income
- Claim deductions and credits that you do not qualify for
- Write a bad check
- Taxes underpaid
- Reporting international income is a requirement.
The tax authorities may also impose interest on filers for both overdue penalties and the tax balance. The auditor will calculate all these amounts during the audit and take into account any attempts you make to correct anything wrong.
You Decide to Appeal the Decision
After the IRS agent compiles a report and notifies you of the result of the audit you have 30 calendar days to accept the proposed changes, pay any outstanding taxes and/or appeal the case.
You can extend the process by several months if you decide to contest the auditor’s adjustments. With the help of an IRS tax professional, such as an enrolled tax agent or tax lawyer, you can reduce penalties and interest.
The Audit Process Leads To Criminal Prosecution
The IRS may prosecute criminals if they have information that makes them suspect criminal activity, such as money laundering, or tax fraud. Only 2,550 of the 626,000 audits that the IRS conducted in 2022 resulted in criminal cases. This is a fairly rare outcome. If a tax audit uncovers criminal activities or deliberate tax crimes, then the case may continue for many years.
Choose Tenina Law For Tax Resolution Now
We are Southern California’s best tax attorney. Tenina law is a group that has been in business for more than 20 years. We are tax experts and have successfully managed numerous IRS audit letters and IRS negotiations. No matter if you’re a business owner, or someone looking for immediate help with tax issues, we can help. Our team can help you get the tax assistance that you need quickly. Our team is open and transparent, so you will get the right information to solve your tax problems. We want you to be able to quickly and efficiently get the answers that you need to resolve your tax problems.
Other Services Provided By Tenina Law
- Non Filed Returns
- Asset Or Property Seizure
- Criminal Tax Defense
- Wage Garnishment
- Installment Agreement
- Levies And IRS Liens
- Penalties And Interest
- And more
Contact us today to learn more about working alongside a tax attorney in Orange County, Sherman Oaks, or one of the many Southern California cities we provide service for.
