{"id":35748,"date":"2018-03-15T11:14:25","date_gmt":"2018-03-15T16:14:25","guid":{"rendered":"https:\/\/www.hrblock.com\/tax-center\/?p=35748"},"modified":"2020-06-05T16:55:06","modified_gmt":"2020-06-05T21:55:06","slug":"how-long-does-it-take-irs-audit","status":"publish","type":"post","link":"https:\/\/www.hrblock.com\/tax-center\/irs\/audits-and-tax-notices\/how-long-does-it-take-irs-audit\/","title":{"rendered":"How Long Does It Take? IRS Audit"},"content":{"rendered":"

You just received an IRS notice informing you that you\u2019re now under audit.<\/p>\n

How long will this process take? Weeks, months, years?<\/p>\n

It depends \u2013 but most audits wrap up well within a year<\/h2>\n

Good news: There\u2019s a time limit (called the statute of limitations). This time limit is how long the IRS has to charge you (or, \u201cassess\u201d) additional taxes on the return that\u2019s being audited. The statute expires three years from the due date of the return or the date you filed it, whichever is later.<\/p>\n

So, for a person filing on April 15, 2015, the statute would expire on April 15, 2018.<\/p>\n

\"How<\/p>\n

In most cases, the IRS will wrap up the audit within a year. Even though the IRS has three years to audit your return, the IRS likes to close audits long before the statute of limitations expires. In fact, the IRS training guide (called the Internal Revenue Manual) states that IRS agents must \u201cstrictly adhere to\u201d the guideline to open and close audits within 26 months after the due date of the return or the date it was filed, whichever is later.<\/p>\n

In rare cases where tax fraud is involved, the IRS doesn\u2019t have a statute of limitations. If there\u2019s a large amount of unreported income, the statute is six years<\/a>, but the IRS rarely goes into an audit assuming an extended statute. The IRS assumes that three years is the limit, and the auditor will generally work to complete the audit within that timeline.<\/p>\n

The type of audit is also important<\/h2>\n

There are three types of IRS audits, lasting from a few months to about a year.<\/p>\n

Mail audits are usually quick and straightforward<\/h3>\n

The IRS does these audits by mail, generally notifying taxpayers within seven months of filing. Mail audits usually wrap up within three to six months, depending on the issues involved and how quickly and completely you respond to the audit letter.<\/p>\n

Office audits usually move quickly<\/h3>\n

You (or your tax pro) will meet with the IRS agent at an IRS office. The IRS usually starts these audits within a year after you file the return, and wraps them up within three to six months. But expect a delay if you don\u2019t provide complete information or if the auditor finds issues and wants to expand the audit into other areas or years.<\/p>\n

Field audits can last up to a year, or more if there are issues<\/h3>\n

In field audits, the IRS meets with you (or your tax pro) at your business or home. The IRS usually starts these audits within a year after you file the return, and they often last about a year.<\/p>\n

The IRS saves field audits for complex situations, often involving small businesses. Field audits take the longest because the IRS will do an extensive review of your finances and records. Field audits often involve multiple tax years, too.<\/p>\n

Four other factors can extend the time to complete an audit<\/h2>\n

1. The IRS finds a lot of things to change on your return (called \u201cadjustments\u201d)<\/h3>\n

If the IRS auditor is making a lot of adjustments to your return, he or she will often dig in and look for more. This higher scrutiny often means that the auditor will open other tax years, so you\u2019ll spend more time under audit.<\/p>\n

2. You own a small business<\/h3>\n

When it comes to small businesses, the auditor will have more work to do in the audit. That\u2019s because it\u2019s harder for the IRS to track small business income, which doesn\u2019t get reported on as many information statements as wage earners receive (like Forms W-2 and 1099).<\/p>\n

In small business audits, IRS auditors spend more time looking at records, such as bank accounts, websites, and client accounting records to determine whether the business reported all of its income. This adds time to the audit \u2013 and for businesses that deal in a lot of cash, it can add months if the IRS thinks the business didn\u2019t report all of its income.<\/p>\n

3. The IRS pursues penalties<\/h3>\n

If the IRS makes a lot of adjustments to your return, the IRS will often want to pursue penalties<\/a>, which can also add time to the audit. The IRS will ask questions about how you tried to comply and build a case for proposing penalties.<\/p>\n

If the IRS ends up pursuing the most severe penalty \u2013 fraud \u2013 the auditor will likely go \u201csilent\u201d while the IRS makes the decision. In these cases, the audit can last for years if the IRS pursues criminal prosecution. Luckily for taxpayers, that\u2019s rare. The IRS pursues criminal fraud in only about 2,000 cases (out of 155 million taxpayers) each year.<\/p>\n

4. You disagree with the auditor\u2019s adjustments<\/h3>\n

If you disagree with the auditor, you can take your case to IRS appeals<\/a> \u2013 and even to court \u2013 which would extend the audit. When you go to IRS appeals, you often add at least six months \u2013 and likely up to a year \u2013 depending on the issues you\u2019re contesting.<\/p>\n

What to do<\/h2>\n

The best advice to wrap up an audit as soon as possible depends on the type of audit.<\/p>\n