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Audit Report

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IRS Definition

Revenue Agent Reports (RARs) should contain all the information necessary to ensure a clear understanding of the adjustments and demonstrate how the tax liability was computed. Based upon the importance of the RAR, examiners should take all necessary steps to ensure report accuracy.

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Once the IRS completes an audit, the auditor prepares an audit report (generally on Form 4549) that shows the changes the IRS is proposing to your tax return, along with the proposed taxes, penalties and interest. This report also includes a Form 886A, which explains why the IRS is changing your return. The examination report is sent with a letter that gives you 30 days to appeal the changes with the IRS Office of Appeals.

Review the entire report carefully with your tax professional. If you disagree with any of the items on the report, including penalties, consult your tax professional for next steps.

Learn how to handle an IRS audit.

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