New change in IRS’ policy
The Internal Revenue Service (IRS) made public a major change on 24 July, 2023. According to the new release “IR-2023-133, July 24, 2023”, the IRS will no longer conduct unexpected visits to taxpayers’ homes or businesses. If you are selected for an audit, the IRS will send you a letter, informing you of the audit reason and requesting a meeting at a convenient time and place.
The IRS also assures taxpayers that the selection criteria for audits will remain the same, based on factors such as income, deductions, credits, and previous audit history.
What does IRS intend?
By adopting this major change, IRS intends to improve the efficiency and transparency of the audit process, as well as to reduce the stress and inconvenience for taxpayers and the hazards and uncertainty faced by the revenue agents.
Why IRS adopted this change?
There are several reasons that contributed to this change adopted by the IRS:
- the IRS hopes that by giving taxpayers more notice and flexibility, it will encourage more cooperation and compliance,
- the fact that scammers sometimes appeared at the door posting as IRS agents was very confusing for the taxpayers and law enforcement,
- this decision also comes after a series of complaints and lawsuits from taxpayers who felt harassed and intimidated by the IRS agents.
The IRS stated that it will only use unannounced visits in exceptional circumstances, such as when there is an imminent threat of destruction of evidence or harm to the public. The IRS also emphasized that it will continue to use other methods of contacting and auditing taxpayers, such as phone calls, letters, and scheduled appointments.
The IRS advises that taxpayers who receive a letter should respond promptly and provide the requested documents or records. Per the IRS most audits can be resolved quickly and easily, as long as the taxpayer cooperates and communicates with the IRS.
This material is for informational purposes only. It does not constitute tax, legal or accounting advice.