You Lost the Audit. Here Are the Rights Nobody Mentioned.

The examination report lands, the number is terrible, and most people assume the conversation is over. It is not even half over. The audit system is built with a ladder of review above the examiner, and the cases that climb it - on time - get different outcomes with remarkable frequency.

Rung One: The 30-Day Letter and Appeals

With the report comes a letter giving 30 days to request review by the Independent Office of Appeals. The request - a protest, formal or small-case depending on the dollars - lays out each disputed issue with facts, documents, and law. Appeals officers operate separately from the exam function and evaluate something examiners are not allowed to consider: the hazards of litigation. An issue the IRS might lose in court can settle at Appeals for a fraction, because settling beats losing.

That standard is the whole reason Appeals exists, and it is why a well-built protest changes results. The conference itself is informal - a phone call, usually - but the written protest does the heavy lifting before anyone talks.

Rung Two: The 90-Day Letter and Tax Court

Skip Appeals or fail to settle there, and the Notice of Deficiency issues: 90 days to petition the United States Tax Court, the only forum where the tax can be contested before paying it. Even filing the petition has settlement value - the case lands with IRS Chief Counsel, who re-evaluates hazards all over again, and most petitioned cases settle without trial. The deadline, though, is absolute. Day 91 is too late forever.

After Assessment: Narrower Doors

Even a missed deadline is not always the end. Audit reconsideration can reopen an exam when new documentation surfaces, and collection due process hearings can sometimes reach the underlying liability when no prior opportunity to dispute it existed. These doors are narrower and less certain - the lesson is to use the wide ones on time.

Wherever you are on the ladder, the controlling question is the date on the last letter you received. Find it and call me; the rungs above you may still be reachable.