IRS Disagrees With the Return. What Happens Next?
Audit, administrative appeal, and judicial review are different stages of a tax dispute.
Examination
The IRS examines the return and can propose adjustments when it believes the taxpayer's treatment is incorrect.
Administrative appeal
Taxpayers can often seek administrative review through the IRS Independent Office of Appeals under applicable procedures.
Notice of deficiency
A statutory notice can give the taxpayer an opportunity to petition the U.S. Tax Court within the required period. Use current rules for exact deadlines.
Tax Court
A qualifying deficiency can generally be challenged in Tax Court without first paying the disputed tax, unlike certain other federal court routes.
The takeaway
Know where the taxpayer is in the dispute process before choosing the next procedural step.
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FAQ
Does every IRS audit go to Tax Court?
No.
Can Appeals resolve disputes?
Yes.
Must a taxpayer always pay first before petitioning Tax Court?
Generally not for a qualifying deficiency case.