What can you do if the IRS audits your tax return and determines you owe more money? If the amount IRS says you owe is less than $25,000, and you disagree with that determination, you should file an appeal.
The two most active IRS divisions are the examination and collection functions. The examination division will audit your tax return and determine if you owe additional tax. The collection division attempts to collect taxes that you owe the IRS. In both situations, if you disagree with the IRS, you can file an appeal to the Office of Appeals, see Appeals. The Appeals mission is to settle tax disagreements without having to go to Court and a formal trial. The Office of Appeals is independent of any other IRS office and provides a venue where disagreements concerning the application of tax law can be resolved on a fair and impartial basis.
If the IRS audits your return and they make a determination of additioan taxes due. If the amount involved is less than $25,000, you can utilize the small case request for Appeals Division rather than the more complicated formal written protest. You can represent yourself if you can adequately explain why you disagree with the IRS findings. Basically, you send a letter requesting Appeals consideration and explaining the audit changes you do not agree with and the reason you don’t agree.
For specific guidance in preparing a small case request/protest, refer to Form 12203, Request for Appeals Review.
If the IRS determines you owe more than $25,000 in additional tax, you may want to consult with your CPA, accountant or tax attorney.