Ana issuancea ofa aa Noticea ofa Proposeda Adjustmenta isa aa parta ofa thea IRSa audita process,a
whicha consista ofa thea followinga steps:
a
Ana initiala contacta lettera thata aa taxpayera receivesa explainsa thata his/hera taxa returna wasa
selecteda fora ana audita anda containsa aa lista ofa thea specifica itemsa reporteda ona thea taxa returna thata
area beinga questioneda bya thea IRS,a witha aa requesta thata thea taxpayera providesa documentationa
toa supporta thea identifieda items.a Thea primarya methoda ofa obtaininga informationa fora thea IRSa
isa througha issuinga Forma 4564,a Informationa Documenta Requesta (IDR).a IDRsa area requireda toa
bea issue-focuseda anda containa aa statementa ofa thea issue.a However,a IDRsa issueda ata thea
beginninga ofa ana examinationa toa requesta basica booksa anda recordsa anda generala informationa
abouta aa taxpayer’sa businessa area nota subjecta toa thea requirementa toa statea ana issuea (Sec.a
4.46.4.2(2)).a Asa thea casea progresses,a thea IRSa maya issuea additionala IDRs.a Asa Sec.a
4.46.4.7(1)a states,a IDRsa encouragea collaborationa betweena thea taxpayera anda thea IRSa toa
discussa anda determinea thea necessarya informationa fora propera issuea development.a Ina simplea
words,a IDRsa area useda bya thea revenuea agentsa toa understanda thea taxpayer’sa positiona anda
developa factuala record.a Fora thisa discussion,a Ia ama goinga toa assumea thea taxpayera submitteda
thea documentationa anda thea revenuea agenta completeda thea fielda examination.a Thea nexta stepa
ina thea audita isa aa Noticea ofa Proposeda Adjustmentsa (Forma 5701),a whicha representsa thea IRS’sa
viewa ofa thea factsa anda itsa analysisa ofa thea issuea (“wea disagreea witha youra positiona
because…”).a Thea forma includesa thea following:a taxa yeara ata issue,a adjustmenta amount,a
accounta ora taxa returna line,a IRCa sectiona asa aa primarya authority,a anda aa summarya ofa proposeda
adjustment(s).a Forma 5471a alsoa containsa thea taxpayer’sa anticipateda responsea date.a
Consequently,a thea taxpayera hasa ana opportunitya toa explaina his/hera positiona anda presenta anya
additionala legala authoritiesa toa supporta thea case.a Pera Sec.a 4.46.4.13.3(1),a thea taxpayer’sa
responsea shoulda describea ina detaila thea legala positiona ona whicha thea taxpayera relies.
References
Sec.a 4.46.4.2(2)
Sec.a 4.46.4.7(1)
Sec.a 4.46.4.13.3(1)
IRSa Audita Survivala Guide:a Navigatea thea IRSa examinationa process.a (n.d.).a RSM.a Retrieveda
from
a a a a a a a a a a a a https://www.hbepc.org/assets/Councils/HoustonBusiness-TX/library/nt-tax-all-
0817_tax-audit-survival-guide_e-book.pdf
• image_91737476821689033575599.png
(74.31a KB)
