Tax Dictionary – Audit Adjustments
Reports should contain all the information necessary to ensure a clear understanding of audit adjustments and demonstrate how the tax liability was computed. Form 886-A is the written explanation of adjustments in all unagreed cases. If an adjustment involves a detailed computation, a worksheet will be attached.
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An audit adjustment is a change made by an IRS auditor to the tax return you filed. At the end of the audit, the IRS will send a letter with an audit report detailing the item or items they have changed, the increase or decrease in taxes, and, if applicable, penalties and interest. This letter gives you 30 days to file an appeal if you disagree with the changes.
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