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What Is Meant By the Start of An Examination

Generally speaking, an examination begins with the inspection of the taxpayer's books and records. It is also possible to initiate an examination based on oral inquiries; however, inspection of books and records and oral inquiries may not constitute an examination in the following instances:

  • Survey of a Joint Committee Case
  • Third-party or related-party contact
  • Inspection of prior or subsequent year records as they relate to another year under examination
  • A request for documents under Revenue Procedure 94-69 (See Revenue Procedure 2005-32)
  • Accelerated Issue Resolution
  • Advance Pricing Agreement program
  • Pre-Filing Agreement program
  • Industry Issue Resolution program.

A return placed under examination will remain under examination until there is a terminating event such as:

  • Issuance of a no-change letter
  • Issuance of a Statutory Notice of Deficiency
  • Petition to a Court of Jurisdiction
  • Assessment date that reflects the final determination of tax and the final administrative appeals consideration
  • Expiration of Statute of Limitations, generally; exceptions can be made for fraud, malfeasance, or misrepresentation of a material fact
Page Last Reviewed or Updated: 03-Nov-2014