The IRS has the right to examine taxpayers' returns. The agency cannot, however, repeatedly audit the same taxpayer for the same issue, and there was either no change or a minor change. The IRS refers to this practice as repetitive examinations.

Taxpayers can request that an examination be discontinued when:

• An examination in one or both of the two preceding tax years resulted in no change or a small tax change to a tax return.

and

• The issues previously examined are the same as the issues selected for examination in the current tax year.

The Internal Revenue Manual states that examiners should check to make sure that a taxpayer isn't being subjected to a repetitive audit.

What to Do if the IRS Contacts You About an Audit Within Two Years of the Last One

If a taxpayer has been contacted about a potential audit, the taxpayer can point out that they've already been subjected to an examination in either of the two preceding tax years. In this situation, the examiner should pause the audit and any scheduled meetings to determine if the audit should be discontinued.

One of the challenges with repetitive examination is determining what qualifies as a small change or identical issues. If the IRS classifies a change as substantial or different than the previous year's issue, the audit may continue.

Some situations will be obvious. The IRS flagged a return two years ago due to inconsistencies with a freelance worker's reported income. The IRS again flags that issue in this tax year, and the freelance worker points out that this same issue was audited two years ago.

Others can be more challenging to determine. Last year, the IRS audited a taxpayer due to questions about their deductions, specifically dental costs. This year, the IRS again has questions about the taxpayer's deductions, only this time, they relate to charitable contributions.

Both issues relate to deductions, but they cover different types of deductions. In this case, an examiner may say the second examination can proceed, as medical costs and charitable gifts are substantially different. It's not, however, a cut-and-dry determination.

Get Help From an Experienced IRS Tax Attorney

If you've been subjected to multiple audits, call Senior Partner, Tax Controversy Attorney, and former IRS attorney Brandon A. Keim at (602) 200-7399 or contact him online to discuss your options.