People First Initiative FAQs: Audits

This FAQ is not included in the Internal Revenue Bulletin, and therefore may not be relied upon as legal authority. This means that the information cannot be used to support a legal argument in a court case.

Q. What happens to open audits and how will the IRS reach out to taxpayers?

A. Due to the operational changes from the COVID-19 crisis, the IRS suspended face-to-face meetings related to current field, office and correspondence examinations. However, it is expanding its secure electronic communications to support taxpayers and may reach out by email or phone in addition to mail to work current cases. The IRS will generally not start new field, office, and correspondence examinations until July 15, 2020. However, the IRS may start new examinations when deemed necessary to protect the government's interest in preserving the applicable statute of limitations.

Q. What audits could the IRS begin during this time?

A. IRS will continue to work taxpayer-initiated requests, for example, requests made through the Taxpayer Advocate Services and taxpayer claims for refunds. IRS will also continue to open new exams related to abusive tax schemes, like micro-captive insurance and syndicated conservation easements.

Q. Unique situations arise with audits. How will the IRS handle those?

A. Particularly for some corporate and business taxpayers, the IRS understands that there may be instances where the taxpayer's desire is to begin an examination while people and records are available and respective staffs have capacity. In those instances, when it's in the best interest of both parties and appropriate personnel are available, the IRS may initiate activities to move forward with an examination – understanding that COVID-19 developments could later reduce activities for an agreed period.

 

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