Form 4549, Income Tax Examination Changes

IRS Definition

Form 4549, Income Tax Examination Changes, is used for cases that result in:

  1. Agreed income tax changes. Normally, the IRS will use the form for the initial report only, and the IRS reasonably expects agreement.
  2. Adjustments to income or deduction items don’t affect or warrant a change in tax liability or refundable credits on the return audited. In such cases, the IRS will notify you of, or secure your agreement to any adjustments, which affect subsequent year returns.

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At the end of an audit, the IRS sends you a letter along with Form 4549 explaining the proposed changes to your tax return. Changes are typically a result of the IRS not accepting your documentation or explanation of one or more items on your tax return.

Depending on how many years were audited, the form can show the results of up to three years of audits. The form also shows any adjustments to the income on your return and the changes to your taxable income, credits and your total taxes due. If there was an increase in the amount of taxes due, penalties and interest will also be shown on the form. You have the right to appeal the auditor’s adjustments.

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