If you are audited by the Internal Revenue Service or a state taxing authority, it may feel like the process lasts forever. The actual length of your audit can depend on a number of factors, including the current tax agency backlog, the nature of your audit and the type of audit. You also have the right to appeal the results of an audit, which can extend the time of the audit dramatically.
Your Initial Response
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Audits come in three general types. A correspondence audit is conducted exclusively by mail, and you probably will not even have to talk to an auditor. An office audit requires you to appear before a tax agent in an office, while in a field audit the auditor will come to you, typically at your place of business.
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In the case of an IRS audit, the audit process begins when you receive a letter notifying you that you are under examination for one reason or another. For a state tax audit, you may receive a phone call, particularly if you are a business. Although you typically have 30 days to respond to the initial notification, if you respond more rapidly, you can shorten the overall time of your audit.
For more thorough audits, you may have to provide extensive documentation for every item on your return. These audits can last hours or days.
Time With Auditor
If you are under a correspondence audit (most common), you never have to actually spend time in front of an auditor. As soon as you mail off the requested information, it is in the hands of the tax agency for processing. With field and office audits, however, the time of your actual in-person audit questioning can vary based on the complexity of your tax situation.
Some audits will only focus on one specific area of your tax return. If you provide the requested documentation, your audit can be over relatively quickly.
For more thorough audits, you may have to provide extensive documentation for every item on your return. These audits can last hours or days. For example, in the state of Missouri, corporate tax audits can typically last between one day and one week.
Agency Response Time
Once an auditor completes his interview, or after the tax agency receives your response to a correspondence audit, the real audit begins. The IRS or state tax authority will review all of the information gathered regarding your return to make a determination of whether or not you owe additional tax.
As with the actual audit interview, the audit review process can be short or long, depending on the documentation you provided and the workload of the tax authorities. Generally, you will hear some type of reply within 30 days of your examination. If the results of your audit are not complete by then, you may receive notification that the audit process is ongoing and that you will receive an update within 30 days.
Appeals Extend Audits
However long it takes to get the results of your audit examination, you generally have 30 days to respond if changes to your tax are proposed. You can either accept the findings or challenge them. If you do not respond within that time limit, this is generally considered tacit acceptance of the changes and your audit is essentially over. If you wish to challenge the findings, you can appeal, which will extend the length of your audit for as long as you fight the changes.
In addition, if you need more time to produce documentation or prepare for the interview process, you can request from the interviewer, an extension on the time.