Examinations, Appeals, Collections, and Refunds Examinations (Audits) We accept most taxpayer's returns as filed. If we inquire aboutyour return or select it for examination, it does not suggest that youare dishonest. The inquiry or examination may or may not result inmore tax. We may close your case without change; or, you may receive arefund. The process of selecting a return for examination usually begins inone of two ways. First, we use computer programs to identify returnsthat may have incorrect amounts. These programs may be based oninformation returns, such as Forms 1099 and W–2, on studies of pastexaminations, or on certain issues identified by compliance projects.Second, we use information from outside sources that indicates that areturn may have incorrect amounts. These sources may includenewspapers, public records, and individuals. If we determine that theinformation is accurate and reliable, we may use it to select a returnfor examination. Publication 556, Examination of Returns, Appeal Rights, andClaims for Refund, explains the rules and procedures that wefollow in examinations. The following sections give an overview of howwe conduct examinations. By Mail We handle many examinations and inquiries by mail. We will send youa letter with either a request for more information or a reason why webelieve a change to your return may be needed. You can respond by mailor you can request a personal interview with an examiner. If you mailus the requested information or provide an explanation, we may or maynot agree with you, and we will explain the reasons for any changes.Please do not hesitate to write to us about anything you do notunderstand. By Interview If we notify you that we will conduct your examination through apersonal interview, or you request such an interview, you have theright to ask that the examination take place at a reasonable time andplace that is convenient for both you and the IRS. If our examinerproposes any changes to your return, he or she will explain thereasons for the changes. If you do not agree with these changes, youcan meet with the examiner's supervisor. Repeat Examinations If we examined your return for the same items in either of the 2previous years and proposed no change to your tax liability, pleasecontact us as soon as possible so we can see if we should discontinuethe examination. Appeals If you do not agree with the examiner's proposed changes, you canappeal them to the Appeals Office of IRS. Most differences can besettled without expensive and time-consuming court trials. Your appealrights are explained in detail in both Publication 5, AppealRights and Preparation of Protests for Unagreed Cases, andPublication 556, Examination of Returns, Appeal Rights, andClaims for Refund. If you do not wish to use the Appeals Office or disagree with itsfindings, you may be able to take your case to the U.S. Tax Court,U.S. Court of Federal Claims, or the U.S. District Court where youlive. If you take your case to court, the IRS will have the burden ofproving certain facts if you kept adequate records to show your taxliability, cooperated with the IRS, and meet certain other conditions.If the court agrees with you on most issues in your case, and findsthat our position was largely unjustified, you may be able to recoversome of your administrative and litigation costs. You will not beeligible to recover these costs unless you tried to resolve your caseadministratively, including going through the appeals system, and yougave us the information necessary to resolve the case. Collections Publication 594, The IRS Collection Process, explainsyour rights and responsibilities regarding payment of federal taxes.It describes: What to do when you owe taxes. It describes what to do ifyou get a tax bill and what to do if you think your bill is wrong. Italso covers making installment payments, delaying collection action,and submitting an offer in compromise. IRS collection actions. It covers liens, releasing a lien,levies, releasing a levy, seizures and sales, and release ofproperty. Publication 1660, Collection Appeal Rights for Liens, Levies,Seizures and Installment Agreement Terminations, explains yourcollection appeal rights. Innocent Spouse Relief Generally, both you and your spouse are responsible, jointly andindividually, for paying the full amount of any tax, interest, orpenalties due on your joint return. However, you may not have to paythe tax, interest, and penalties related to your spouse (or formerspouse). New tax law changes make it easier to qualify for innocent spouserelief and add two other ways for you to get relief. For moreinformation, see Publication 971, Innocent Spouse Relief,and Form 8857, Request for Innocent Spouse Relief (AndSeparation of Liability and Equitable Relief). Refunds You may file a claim for refund if you think you paid too much tax.You must generally file the claim within 3 years from the date youfiled your original return or 2 years from the date you paid the tax,whichever is later. The law generally provides for interest on yourrefund if it is not paid within 45 days of the date you filed yourreturn or claim for refund. Publication 556, Examination ofReturns, Appeal Rights, and Claims for Refund, has moreinformation on refunds. Tax Information The IRS provides a great deal of free information. The followingare sources for forms, publications, and additional information. Tax Questions: 1-800-829-1040 (1-800-829-4059 forTTY/TDD users) Forms and Publications: 1-800-829-3676(1-800-829-4059 for TTY/TDD users) Internet: www.irs.ustreas.gov TaxFax Service: From your fax machine, dial703-368-9694. Small Business Ombudsman: If you are a smallbusiness entity, you can participate in the regulatory process andcomment on enforcement actions of IRS by calling1-888-REG-FAIR. Treasury Inspector General for Tax Administration:If you want to confidentially report misconduct, waste, fraud,or abuse by an IRS employee, you can call 1-800-366-4484(1-800-877-8339 for TTY/TDD users). You can remainanonymous.