7 Habitual Mistakes Companies Make – Chapter 4 (13)

TaxConnections Blog Post
What Can Be Expected at the End of an IRS Query? –

THE PURPOSE OF an audit by the IRS is to verify the taxpayer’s tax affairs with their hope of ultimately raising an additional assessment. Once the exchange of information and documentation has been completed, the IRS must be requested to provide a letter of findings prior to any additional assessment being raised, in which they should explain in clear and certain terms the facts that they are relying upon in coming to their decision and precisely which sections of the tax legislation they propose to apply.

It should be made clear that a taxpayer is entitled to such a letter of findings and that the taxpayer should have an opportunity to respond thereto prior to any additional assessments being raised. It is a good idea to meet with the IRS so that they can discuss the letter of findings with the taxpayer. It is also a good idea to take the IRS through the taxpayer’s response to the letter of findings so that the parties can attempt to ultimately agree on the additional assessments to be raised, if any.

– – For this series posted to date, please select “Daniel Erasmus” in the Authors category on the Worldwide Tax Blogs page.

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International Tax Attorney, EA, US Tax Court Practitioner in the USA, Counsel of the High Court in South Africa, adjunct Professor of International Tax at Thomas Jefferson School of Law.

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