Should an Extension be Given to the IRS to continue an Audit?


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Question: http://www.lawguru.com/cgi/bbs/mesg.cgi?i=556453537
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Category: Tax and Taxation Law
Location: MA
Subject: Audit Extension

The IRS has been auditing my 2001 Federal return since April, 2003. After no communication since May, 2003, I received a letter last week requesting an extension through December, 2005. The 3-year limit ends in April, 2005. Should I give the IRS the extension?


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Reply: http://www.lawguru.com/cgi/bbs/mesg.cgi?i=628780324
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Category: Tax and Taxation Law
Location: MA
Subject: Re: Audit Extension

You should definitely discuss this matter with a tax attorney prior to signing the extension. It all depends on the type of audit. For example, if the IRS is reviewing every document for a Taxpayer Compliance Audit, an extension would probably be inadvisable. The tax attorney could review the documents and determine the risk. Usually, the denial of the extension results in the issueance of a Notice of Deficiency which means you must file in US Tax Court within 90 days. There is also an administrative review prior to the actual trial. Please see my website at http://www.taxesq.com for further information.

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