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A correspondence audit is relatively limited in scope. An agent typically conducts the audit using letters and phone calls to work with the officers or a representative of the organization. A correspondence audit can expand and become an in-person (field) audit, particularly if the issues grow more complex or the organization does not respond.

What To Expect:

  1. When you ask for additional information, the IRS will attempt to answer your questions. If necessary, telephone contact will be made. The IRS will make every effort to process replies within 45 days after they’re received.

  2. If your return correspondence to the IRS includes an acceptable explanation to the IRS’ proposed adjustment, then you will receive a “no-change” letter.

  3. However, if your return correspondence to the IRS is NOT satisfactory, then the IRS will issue a 30-day letter advising you of their appeal rights and proposed tax changes.

  4. If the IRS still needs additional information or documentation, even after you respond, then you will receive a further letter with a request for more documentation.

  5. If, at that point, the 2nd explanation is still not sufficient to satisfy the IRS’ request, then the return might be transferred to a local office for further review your return.

Best advice: stay calm and really see if you are best to communicate with the IRS or should you hire an representative. Treat the IRS agent with respect and respond to all requests in a timely manner.

Need help with your crypto taxes? Well, contact Jamaal "Crypto J" at jamaal@jstaxcorp.com!

Podcast: https://anchor.fm/36chamberscryptotaxes

Website: www.36chambersofcryptotaxes.com

YouTube: https://www.youtube.com/channel/UCNoiZj7UxmuMrPtyIaSX41Q

IG: @36chamberscryptotaxes

Twitter: 36cryptotaxes

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