The duration of an IRS audit can be a period of uncertainty for many taxpayers. John Milikowsky, founder of Milikowsky Tax Law, breaks down what to expect time-wise when you’re faced with an IRS audit, whether you’re an individual taxpayer or a business owner.
- Individual Returns: An audit for individual returns typically spans four to six months, provided all documentation is submitted promptly and queries are answered.
- Business Returns: Audits involving businesses can extend from six months to a year due to the increased volume of records and transactions.
- Complexity and Expansion: The potential for an audit to expand to additional years or recently filed returns adds complexity and could extend the timeline.
How long you’ll be dealing with an IRS audit is not set in stone. The timeline varies significantly based on several factors, including the type of return being audited and the complexity of your financial records.
For Individual Taxpayers:
If your tax situation is relatively straightforward and you do not own a business, you can expect the audit process to last around four to six months. This assumes that you are organized and responsive to IRS requests.
For Business Owners:
Business owners or those with more complex tax situations should prepare for a longer audit process, lasting anywhere from six months to a full year. The more extensive record-keeping required for business operations, such as inventory and a multitude of transactions, necessitates a lengthier review period.
Navigating the Audit Process:
Having experienced legal representation, such as a tax attorney, can help streamline the process. They can ensure timely record submission and tackle legal issues that may arise. Coordination between your CPA and tax attorney can also be beneficial in addressing the IRS’s queries more efficiently.
Be Prepared for Expansion:
It’s not uncommon for the IRS to extend their investigation to additional years if discrepancies are found. If you’ve filed a return during an open audit, be aware that the IRS may scrutinize that as well.
An IRS audit doesn’t have to be an endless process. By understanding the expected timelines and preparing accordingly, you can navigate through the audit with greater ease and confidence. If you’re currently facing an audit and need expert advice, Milikowsky Tax Law is here to help.