Did you receive IRS letter 2205 from the IRS stating that you’ve been selected for an examination (i.e. audit)?
Don’t worry, while it can be stressful to have the IRS audit your return, you are not in trouble. You just need to clarify your situation.
The most important thing is to read the IRS notices you receive and respond properly within the given timeframe. Here’s more on how to do that.
How to respond to an IRS Selected for Examination Letter
When you receive a Selected for Examination Letter from the IRS (IRS Letter 2205), you should read it thoroughly and then call the contact person at the given number.
There is a response date on the notice, you need to call by that date.
When you call, the IRS representative will explain what you need to know, including:
- The items that will be undergoing examination.
- The types of documentation you need to bring.
- How the examination process works.
- The date, time, and agenda for the first meeting.
You can also ask any questions or share any concerns you have.
What does it mean when the IRS selects a return for examination?
The Selected for Examination letter from the IRS means that the tax return for the year stated on the IRS Letter 2205 is going to be audited.
The reason for the audit is that you have issues which the IRS has determined need further documentation and analysis to prove. They may have received conflicting information from other parties.
The main issues triggering the examination will be listed in your IRS letter 2205. Further, an ‘Information Document Request’ will be included which specifies the documents you need to bring to the meeting.
You will set an appointment and then meet with an IRS representative to explain the issues. The person may settle the case at the first meeting or may require an additional meeting if further documentation is needed.
Questions about other IRS letters or notices? Check out our definitive guide.
What potential outcomes are possible?
If you can provide sufficient evidence to prove that your original tax return was correct, then it will stand and no changes will be made. However, if the auditor discovers that mistakes were made, your return will be updated to reflect the findings. You may owe additional tax, penalties, and interest.
If you agree with the audit findings, you will sign an examination report or similar form. You can request a conference with an IRS manager, undergo mediation, or file an appeal if you do not agree.
What if you need tax assistance?
An audit can be stressful. Plus, you are pleading your case against an expert in tax laws. You can enlist the help of your own by hiring a tax relief firm. They can advise you before and represent you during the audit meeting.
Further, if you do end up owing more money, they can help you to determine the best way to settle your debt. Often, this move can save you money, time, and prevent any undue criminal charges.
Review and compare industry-leading tax firms below.
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.