What This Letter Means
You asked the IRS to reconsider an audit that was already closed. An examiner reviewed your request and the information you sent. Letter 2726 gives you the result: the IRS did not allow the disputed issues and did not change the assessment from the original audit.
The letter comes with Form 4549, the examination report. The "Other Information" section of that report states that you requested an audit reconsideration and that the IRS did not allow the disputed issues. The examiner is required to explain why your request was denied. Look for that explanation on Form 4549 or in an attached explanation such as Form 886-A.
What to Do
- Read the explanation. Find out exactly which items were rejected and why.
- If you agree, sign Form 4549 and return it as the letter instructs.
- If you disagree, you can ask for a meeting with the examiner's manager.
- You can also request a conference with the IRS Independent Office of Appeals. The letter gives you 30 days to make that request.
If you don't respond by the date on the letter, the IRS closes the reconsideration. The original audit assessment stays on your account.
If You Disagree
Audit reconsideration exists so the IRS can look at information it did not consider during the original audit. If the examiner rejected your documents, figure out why. Was something missing? Did the records fail to match the item in dispute? Fix the gap before Appeals. Tie each document directly to each disputed item. Keep copies of everything you send, and use certified mail for paper responses.
If You Owe the Balance
The balance from the original audit is still due. Interest and penalties keep growing while it stays unpaid. Paying reduces them. If you can't pay in full, ask the IRS about a payment plan. You can authorize a representative to deal with the IRS for you by filing Form 2848.
If you received Letter 2726 and want help deciding whether to take your audit to Appeals, call us at (813) 229-7100.