How Long Does an IRS Audit Take to Complete?

An IRS audit can be a daunting experience, but understanding the process and timeline can help alleviate some of the stress. The duration of an audit varies depending on its type and complexity, but most audits are completed within a few months.

Types of IRS Audits and Their Timelines

The IRS conducts three main types of audits:

Correspondence Audits: Conducted entirely by mail, these audits typically take 3-6 months to complete.
Office Audits: Involve an in-person meeting with an IRS agent at an IRS office, and usually take 3-6 months to complete.
Field Audits: The most complex and time-consuming type of audit, often involving small businesses. Field audits can take around 1 year to complete.

Factors Influencing Audit Duration

Several factors can influence the length of an IRS audit, including:

Type of Audit: Field audits are typically more complex and time-consuming than correspondence or office audits.
Complexity of Issues: Audits involving complex tax issues or multiple tax years may take longer.
Availability of Information: Delays in providing requested information can extend the audit process.
Availability of Parties: Scheduling conflicts between the auditor and taxpayer can also impact the timeline.
Taxpayer’s Agreement/Disagreement: If the taxpayer disagrees with the auditor’s findings, the audit may be extended for an appeal.

Common Reasons for Audit Delays

Certain actions can prolong the audit process, such as:

Failure to Respond: Failing to respond to audit notices or requests for information can significantly delay the audit.
Numerous IRS Adjustments: If the IRS makes substantial adjustments to the taxpayer’s return, it may require additional time for review.
IRS Pursuit of Penalties: If the IRS suspects fraud or tax evasion, the audit may be extended for further investigation and potential penalties.
Appeals: Taxpayers who disagree with the auditor’s findings can appeal the decision, which can add months to the process.
Small Business Audits: Small business audits often involve extensive document review, which can contribute to longer timelines.

Tips for Shortening the Audit Process

To expedite the audit process, consider the following tips:

Respond promptly to IRS notices and requests for information.
Maintain pertinent documents for at least three years after filing the related return.
Avoid overdue or unfiled tax returns.
Consider hiring a tax professional or working with a Low Income Taxpayer Clinic (LITC).
Maintain active communication with your auditor.

Statute of Limitations for IRS Audits

The IRS generally has three years from the date a tax return was filed or due (whichever is later) to audit the return. However, in certain cases, the statute of limitations can be extended to six years or indefinitely.

While an IRS audit can be stressful, understanding the process and timeline can help manage expectations. Most audits are completed within a few months, but complex audits or delays can extend the process. By responding promptly, providing necessary information, and seeking professional assistance if needed, taxpayers can help expedite the audit and minimize potential disruptions.

Tax audits: How long do they take, and what are the odds of getting one?

FAQ

How long does an audit investigation take?

Now for the answer to the all too familiar question every tax attorney gets: “How long does a tax audit take?” The IRS audit period itself should generally take no more than five to six months. Sometimes with proper preparation, they can be resolved faster.

How long is the average audit?

On average, a small business audit can take anywhere from a few weeks to several months to complete. For a small business with straightforward financial records, the audit process might only take a few weeks.

How long should an audit last?

There is no set timescale as to how long an audit should take, nor is there a ‘menu’ of ideal fees to charge – it takes as long as it takes if it is to be done in accordance with the rules.

Why do audits take so long?

Performing an audit requires more than just checking numbers on a spreadsheet; auditors come to understand how your organization operates — its goals, mission, and vision — and the internal controls it uses to ensure its finances support operations fairly.

How long do IRS audits take?

The IRS usually starts these audits within a year after you file the return, and they often last about a year. The IRS saves field audits for complex situations, often involving small businesses. Field audits take the longest because the IRS will do an extensive review of your finances and records.

How long does a field audit take?

As the most comprehensive type of audit, a field audit can take anywhere from 6 months to a year or even longer. This type of audit involves an IRS agent visiting the taxpayer’s home, business, or accountant’s office. These are the most extensive type of audits where every line of the tax return must be substantiated by documentation.

How long do you have to open a tax audit?

In fact, the IRS training guide (called the Internal Revenue Manual) states that IRS agents must “strictly adhere to” the guideline to open and close audits within 26 months after the due date of the return or the date it was filed, whichever is later. In rare cases where tax fraud is involved, the IRS doesn’t have a statute of limitations.

How many years does the IRS audit a tax return?

An audit the IRS conducts on you can include returns filed within the last three years, according to the IRS. “If we identify a substantial error, we may add additional years. We usually don’t go back more than the last six years,” a post on the agency’s site states. “The IRS tries to audit tax returns as soon as possible after they are filed.