For audits, the IRS generally requires taxpayers to respond within a certain period of time, often 30 days. Taxpayers who fail to respond lose their audit by default, meaning they're required to pay the amount the IRS believes is owed. They're also responsible for paying any fines and penalties.

Failing to respond in time isn't always the end of the road for taxpayers. Taxpayers may be able to reopen an assessment via audit reconsideration.

What is a Default Assessment?

When a taxpayer fails to respond to an audit notice, the IRS can proceed with the information it currently has. This is a default assessment.

The IRS may rely on third-party information to determine a taxpayer's liability. The IRS doesn't have to consider deductions and exemptions when determining a taxpayer's liability.

With a default assessment, the taxpayer must pay the amount of unpaid tax, as determined by the IRS. This includes not only estimated taxes but also any fines and penalties.

What is Audit Reconsideration?

Taxpayers may be able to avoid paying this amount through audit reconsideration. During this process, the IRS reviews a case that it had closed.

Taxpayers may qualify for a reconsideration if they fall into one of the following categories:

• They didn't respond to the original audit.
• They moved and didn't receive the audit notice or other correspondence from the IRS.
• They have new information, evidence, or documents related to their tax liability.
• They disagree with the IRS's findings, including believing or knowing the IRS made its assessment based on inaccurate or incomplete information.

How Does a Taxpayer Request an Audit Reconsideration?

Taxpayers must request a reconsideration in writing. In this letter, they must list every reason why they disagree with the IRS's assessment and explain why.

The taxpayer should also include any relevant documents, such as:

• Receipts
• Bank statements
• Canceled checks

The taxpayer should keep the originals or copies of all documents. In addition, they need to complete Form 12661.

The more evidence a taxpayer can provide that supports their position, the stronger their case for a reassessment.

If you have questions about failing to respond to an audit or audit reconsideration, 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.