Most people meet the IRS for the first time through a letter proposing that they owe more than they reported. It rarely explains what the agency actually has, what it must establish, or what happens if you disagree. That asymmetry is the reason representation matters more in examinations than at any later stage.
Rice Tax Law PLLC takes over contact with the examiner. Correspondence is redirected to the firm, requests for information are answered on your behalf, and the scope of the examination is held to the years and issues actually under review.
The three kinds of examination
Who has to prove what
A notice of proposed adjustment is not a finding of fact. The taxpayer generally carries the burden of substantiating deductions and credits, which is why recordkeeping drives so many outcomes. But the government does not get to assert unreported income without a basis, and in certain circumstances the burden shifts to the IRS once a taxpayer has produced credible evidence and cooperated with reasonable requests.
Knowing which of those situations you are in changes what you send, what you say, and whether you should be answering at all.
The first weeks set the scope. An examination that begins on one issue for one year can expand to additional issues and additional years. Narrowing it after it has widened is considerably harder than keeping it narrow to begin with.
If the examination does not resolve
An examination that ends in disagreement produces a report and, in most cases, a right to have the matter reviewed by IRS Appeals — an independent function that weighs how the case would likely fare in litigation. Most disputes end there.
If Appeals does not resolve it, the IRS issues a Notice of Deficiency, which starts a 90-day period to petition the United States Tax Court. In most circuits that deadline is treated as jurisdictional and cannot be extended, and this firm is admitted to carry a case through that stage rather than referring it elsewhere.
What to do now
Find the notice number in the upper right corner of the letter and the date printed on it. Do not throw away the envelope. Avoid calling the examiner to explain before you know what the file contains — explanations offered early are difficult to retract, and nothing you say to the IRS is privileged.
Have a letter in front of you?
Send a general description of the situation. The deadline that governs, and whether it is still open, will be identified. No charge for that conversation.
If your notice has a date on it, start now.
Send a general description of your situation. Please do not include Social Security numbers, account numbers, or documents in a first message.