Audit Reconsideration: Reopening an IRS Audit You Lost or Never Answered

I hear some version of this every week: "The IRS audited me, I never got the letters, and now they say I owe thousands for deductions I can prove." Or: "I sent everything, and the examiner says they never got it."

That is what audit reconsideration is for. It is not a loophole and it is not a favor. It is a written IRS process, grounded in the agency's authority to abate assessments that exceed what you actually owe.

What audit reconsideration is

IRM 4.13.1.2 defines it as the process the IRS uses to reevaluate the results of a prior audit where additional tax was assessed and remains unpaid, or a tax credit was reversed. It is also the process used when you contest a substitute for return by filing an original return, and when there was an IRS computational or processing error in assessing the tax.

The authority is IRC 6404(a) and Treas. Reg. 301.6404-1, which give the IRS discretionary authority to abate an assessment that is in excess of the correct liability (IRM 4.13.1.1.2). The IRM ties the process to Policy Statement 3-15, Reconsideration of an Unpaid Assessment.

Publication 3598 (Rev. 11-2023), the IRS's own guide, lists the reasons people request it: you did not appear for your audit, you moved and did not receive correspondence, you have additional information you did not provide during the audit, or you disagree with the assessment.

The five criteria

IRM 4.13.1.2.1 sets the test. To request audit reconsideration:

1. You must have filed a tax return.
2. The assessment must remain unpaid, or the IRS has reversed tax credits you are disputing.
3. You must identify which adjustments you are disputing.
4. You must provide new information for the audited issues that was not considered during the original exam,
5. or there was an IRS computational or processing error in assessing the tax.

Two points deserve emphasis. First, "new" means new to the IRS, not newly created. A receipt from three years ago that the examiner never saw is new information. Second, the request must be specific. "I disagree with the audit" is not a request. "I dispute the disallowance of $8,400 in charitable contributions on line 12; attached are the written acknowledgments" is.

When the IRS will not reconsider at all, and what to do instead, is covered in when audit reconsideration is denied or unavailable.

Timing: there is no fixed deadline, but there is a practical one

Publication 3598 says an audit reconsideration request can be made anytime after an examination assessment has been made and the tax remains unpaid. That is the good news.

The practical deadline is the moment the balance is paid, whether by you, by a refund offset or by a levy. Once it is fully paid, Publication 3598 says you must file a formal claim instead, and claims carry the IRC 6511(a) limits: generally three years from filing or two years from payment, whichever is later. Waiting can quietly convert an open door into a closed one.

How to build the request

Publication 3598 lays out the steps, and I would add a few of my own.

1. Get the examination report. Find the Form 4549 and the explanation of items. Identify each adjustment you dispute. If you never received the report, request it. See reading Form 4549.
2. Gather proof for each disputed item. Publication 3598 tells you to verify that the documentation is new information and is for the tax year in question.
3. Write the request. A letter is fine. The IRS recommends Form 12661, Disputed Issue Verification, to explain the issues you disagree with. The IRM confirms you can submit your own written request or Form 12661.
4. Attach a copy of the Form 4549 if you have it, plus copies of your documents. Do not send originals. Publication 3598 says originals will not be returned.
5. Label everything. If faxing, put your TIN and the tax year on each page so the pages stay with your case.
6. Include a daytime and evening phone number and the best time to reach you.

Good organization matters here more than anywhere. The reconsideration examiner did not do the original audit and is reading your file cold. Make it easy. For document strategy, see what records the IRS requires and rebuilding missing records.

Where to send it

This is where requests go to die. Send it to the right place.

Publication 3598 tells you to send the request to the address of the IRS campus shown on your examination report, and lists the campus addresses and toll-free numbers. The IRM routing rules (IRM 4.13.1.3.2) say campus exam reconsiderations are worked in the campus that conducted the original audit, and area office (field and office) exam reconsiderations go to the servicing SB/SE campus.

Two important exceptions: reconsiderations of assessments from the Automated Underreporter program (CP2000 cases) and the automated substitute for return program are routed differently. If your assessment came from a CP2000, read reopening a CP2000 assessment instead.

Also note what the Central Reconsideration Unit does not work: the IRM lists audits of any tax form other than Form 1040, fully paid prior audits (which require a formal claim), math error protests, and requests for an explanation of an account balance (IRM 4.13.1.4.9.1).

Collection while it is pending

Ask for a collection hold in your request. Publication 3598 says that when the IRS receives your documentation, it may delay collection activity, but it may resume collection if the documentation is not sufficient and you do not respond to requests for more information within 30 calendar days.

The IRM adds limits. A collection hold generally is not input when less than one year remains on the collection statute, when the account is in installment agreement status, or in certain other statuses (IRM 4.13.1). If you have an installment agreement, Publication 3598 says to keep making the payments. Do not stop paying and hope.

What happens next

Publication 3598 says to expect to hear from the IRS within 30 days after submission. The IRS may send a letter asking for more information. Answer it, completely and on time.

The result comes in one of three forms: the information is accepted and the assessed tax is abated, it is accepted in part and the tax is partially reduced, or it does not support your claim and the assessment stands.

A special note for three situations the IRM flags: if you were in a combat zone during the original audit, if you were in a federally declared disaster area, or if you were a victim of identity theft, special procedures apply (IRM 4.13.1.4.3). Say so prominently in your request.

If the IRS denies reconsideration

You still have options. Publication 3598 lists them: request an Appeals conference, pay the amount due in full and file a formal claim, or do nothing and receive a bill.

The IRM explains that a reconsideration case is forwarded to Appeals if requested when the case was accepted for reconsideration and your request was disallowed in full or in part (IRM 4.13.1.4.18). It is not forwarded if you skipped the appointment or the request was never accepted in the first place. When a case goes to Appeals, the IRM directs a collection hold so you are not subjected to collection activity pending the appeal, while interest continues to accrue.

The bottom line

Audit reconsideration is the second chance the system builds in for people who lost the first round by default. It works best when you bring specific, organized, genuinely new proof and send it to the right campus while the balance is still unpaid. If you want help evaluating whether your case fits, the firm's page on IRS audit representation explains how we approach it.

The IRS made an assessment based on what it had. Give it what it did not have.