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Form 4549 – IRS Examination Report Of Changes ExplainedThe IRS Examination report is sent out to those tax payers that were audited by the IRS. The report consists of everything that the IRS representative used in their audit process. When you receive this report, it should completely explain the adjustments made and document how the tax liability was computed.
Examples of why you may receive a Form 4549 from the IRS.
Adjustments to IncomeThe IRS form 4549 is the “Income Tax Examination Changes” report. This form is filled out by auditors to show the adjustments to income made in order to arrive at the total adjustments. The adjustments to income can come from an increase or decrease to your taxable gross income. They are also adjustments for expenses disallowed on additional expenses that are allowed.
Corrected Taxable Income & TaxHere is where the adjustments are compared to the income previously shown on the tax return to arrive at the corrected taxable income. Then, the additional taxes, if any, are computed. Usually, this is a much larger number than taxpayers expect. If you are not happy with the additional taxes on your IRS Examination Report, please consult us concerning your options.
Less CreditsBased on the changes to income and the tax liability, credits may be affected. Any changes will be made to arrive at the net balance of taxes owed.
Penalties, Interest, Deficiency Increase
Here is where you are charged estimated tax penalties, late-payment penalties & interest, late-filing penalties, substantial understatement of tax penalties, etc. Some of these may be removed. By knowing how to apply the rules in the IRS Penalty Handbook, and knowing what the IRS is willing to accept, you may avoid paying certain penalties. Please contact us for more details.
Most people tend to focus on the amount of taxes being charged on the IRS Examination Report. They forget that other issues are being considered. A good audit representative will consider the following issues in addition to just lowering the overall taxes on the report:
- Is the IRS tax examiner sending the case file to Criminal Investigation because they think there was fraudulent activity?
- Is the auditor planning on waiting until you file your next tax return before closing the audit in order to allow the IRS to examine that as well?
- Is the auditor trying to convince you to give them your returns or bank statements for other years?
Still Have Questions About The Form 4549 From The IRS?
Since Joe Mastriano PC deals with the IRS every single day, we know what steps we need to be take to resolve your tax problem. With over 30 years of experience, we have the experience and a successful track record that will put you at ease. We will discuss your options, explain to you how to handle the situation and if necessary, we can manage the process for you. Visit our website for free advice or call us NOW (713)774-4467. Hire the ‘KILLER IRS REPRESENTATIVE’ to resolve your tax problem.