You received the notice that you are being audited. While not a fun situation, you responded and sent in the required documentation. Now you received IRS Letter 3500-interim. What does it mean and what should you do?
Here are the basics.
What is the purpose of IRS Interim Letter 3500?
IRS Letter 3500, Interim Letter, is sent to a taxpayer when the IRS needs additional time to provide a response. Being so, it confirms that the IRS has received your documents and provides you with a new timeframe for when you can expect the next response.
You will receive another letter which will state when you can expect the results.
How to respond to IRS Letter 3500
The good news is you do not have to take any action at this point. You provided the documents that the IRS requested and now the ball is in its court.
However, make a note of the timeframe. If you haven’t heard back from the IRS by the last day of the timeframe they provided, call the person listed on the notice to check on the status.
Further, you can call the contact at any time if you have questions or concerns.
Frequently asked questions about IRS audits
How long does an IRS audit usually take?
Most business with the IRS is not fast, as correspondence is via a series of letters sent in the mail. IRS audits vary depending on the situation but usually settle well within one year, according to H and R Block.
The type of audit influences the time frame. Mail audits are the quickest followed by office audits, while field audits usually take the longest.
Further, the number of discrepancies and the level of organization you have will make an impact.
How common are IRS audits?
IRS audits are rare. When they do occur, most are performed via mail correspondence.
What is the statute of limitations on tax returns?
The statute of limitations states that the IRS can only assess additional taxes on a return within three years of the date it was due or the date you filed (whichever is later).
However, there is no statute if tax fraud is an issue.
What if you disagree with the result of your audit?
If you disagree with the audit results, you can file an appeal with the IRS Office of Appeals within 30 days. If more than 30 days pass, you can file a petition with the Tax Court after you receive the Notice of Deficiency.
Need professional tax assistance?
Handling an audit can be stressful and confusing but having a tax professional on your side can help. Someone who know the ins and out of the law and can protect your interests. You don’t want to pay more than you owe or get stuck in a situation where you can afford your normal expenses due to tax debt.
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Jessica Walrack is a personal finance writer at SuperMoney, The Simple Dollar, Interest.com, Commonbond, Bankrate, NextAdvisor, Guardian, Personalloans.org and many others. She specializes in taking personal finance topics like loans, credit cards, and budgeting, and making them accessible and fun.