What is IRS Audit Reconsideration?

6a0133f3fc5805970b01bb07aa348e970d-320wiA family child care providers’ worst fear is being audited by the IRS.

Let’s say you were audited and now it’s over.

Is there anything more you can do about it?

The answer is Yes in two situations:

Amend Your Return

If you were audited for 2013, 2012, or 2011, you can still amend your tax return and fight again! It seems too good to be true, but it’s not.

I’ve spoken with many family child care providers who were audited, but were not satisfied with the result.

* They believed their tax preparer didn’t offer them much assistance,

* They didn’t realize until later that the auditor was wrong about certain issues, or

* They didn’t claim all their deductions because they didn’t know they could deduct them or how to present the best evidence for their deductions.

You can amend your tax return back three years from the date you filed your tax return, even if you were audited for one or more of those years.

To amend your return, file IRS Form 1040X Amended US Individual Tax Return. If you have the adequate records to claim deductions you missed, don’t hesitate to amend. I also have a chapter in my Family Child Care Tax Workbook and Organizer about how to file IRS Form 1040X.

See my article on amending your tax return.

Audit Reconsideration

The second situation where you can challenge your audited tax return is to file for Audit Reconsideration, if you are not satisfied with the results of your audit.

The two situations where you can use this process is when you have not paid in full what you owe the IRS, or if you have information about your return that you did not previously submit to the IRS.

In my experience, providers often do not submit all the evidence they have to claim all of their business deductions. This could include deductions that were never originally claimed (because they didn’t know they could) or deductions that were denied, but the provider had other evidence she didn’t submit.

The IRS flyer “The Audit Consideration Process” describes the details in how to file for audit consideration.

If you are currently making payments under an installment plan with the IRS, continue to make your payments during the audit reconsideration process. If you are having trouble making your payments, contact the IRS Taxpayer Advocate Service.

I Can Help

I can provide help if you are audited by the IRS, or if you are considering using either of the above two options after your audit was completed.

I can provide assistance if you are a member of The Child Care Business Partnership. This Partnership is for providers who have the Minute Menu Kids Pro software. You can get a free 30 day trial of the software. Members receive one-on-one technical assistance and instructional videos from me on how to more effectively utilize this software to save you time and money on your taxes.

As a member of the Partnership, I can advise you whether it makes sense to either amend your tax return or file for Audit Reconsideration. I can also explain how to organize your records to make the best possible case to the IRS.

So, the message is: There is life after an IRS audit.

Tom Copeland – www.tomcopelandblog.com

Image credit: busysuperva.com

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Categories: IRS and IRS Audits, Record Keeping & Taxes

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