Letter 3340C tells you the IRS denied your request for audit reconsideration. Audit reconsideration is the process for asking the IRS to reopen an assessment from an audit or a substitute for return because you have new information it did not consider. The letter explains why the request was denied.
Common Reasons for Denial
The IRS usually denies audit reconsideration when the request does not include new information, when the documentation does not support a change, when the liability was already settled by a closing agreement or an offer in compromise, or when the Tax Court already decided the issue. A request that simply says "I disagree" will be denied.
What You Can Do Next
Read the reason carefully. If the denial is about missing documents, a new request with complete, organized support can succeed. If the IRS considered your evidence and disagreed, you can generally ask for Appeals consideration if Appeals has not already reviewed the issue. Another route is to pay the tax for at least one period, file a refund claim, and if it is denied, sue for refund in federal court. Refund claims have strict time limits, so check them before choosing that path.
If the balance is in collection, the denial does not stop collection. Address the balance at the same time.
If you received Letter 3340C, call us at (813) 229-7100. We handle audit reconsideration and the alternatives when it fails.