Beware the I.R.S.’s speeded-up audit

Of course it hasn’t; the taxpayer just got the first letter! The second letter threatens the loss of the right to appeal within the I.R.S., forcing the recipient to go into the court system to resolve the case.

The letters are in language that can be mystifying for the average citizen. Here’s an example: “As of the date of this letter, we haven’t received all of the information we requested on Form 4564 … If you don’t provide the information requested on the enclosed Form 4564 or contact me to confirm you have no additional information to provide by the response due date listed above, we will close your examination based on the information we have now. If you don’t agree, you won’t be able to appeal within the I.R.S. before we issue a notice of deficiency.”

If the letters are not taken seriously and dealt with within the prescribed time frame of 15 to 25 days, the consequences may be dire. That’s far less than the 45 to 75 days that taxpayers used to have before they received a notice of deficiency. Once a notice of deficiency is issued, the audit case is in the jurisdiction of the United States Tax Court.