Reconsideration is, in some ways, an appellate process. You are asking the IRS to “reconsider” their previous determination of your tax liability. Reconsideration is most often filed by people who:
- Have missed a tax return and were subjected to a substitute form being filed on their behalf
- Failed to appear for an audit (whether by choice or inadvertently)
- Moved and didn’t receive important documentation from the IRS or state tax authorities as a result
- Don’t agree with the results of a prior audit or tax assessment
Reconsideration is also helpful for people who have new information that wasn’t available at the time of earlier IRS proceedings or tax return filings.
Such new information could include:
- Bank account or payroll records
- Sales receipts
- Business financials (profit/loss statements, expenditures, etc.)
- Mortgage documents
- Copies of official court records (like divorce decrees or adoption records)
- Other financial or personal data that could impact the results of an audit or change the amount of tax due
- Proof that tax liability had already been paid at the time it was assessed (for example, quarterly business tax payments were made and the checks were cashed, but a processing error led the IRS to “double-bill” them)
An important note about the reconsideration process is that it isn’t the same thing as filing an amended return. If, for example, you previously paid the amount the IRS says you owed but now realize they were wrong in their assessment, you must file a formal amended return instead of seeking reconsideration. Reconsideration requests are also not appropriate for people who resolved their tax liability by accepting an offer in compromise or by filing closing agreements, or for those whose tax liability has been adjudicated by the United States Tax Court.
Reconsideration may be the best way for you to resolve your disputed tax liability, or another route may be more appropriate. Only you, working closely with an experienced tax attorney, can decide which course of action will yield the best result for your unique financial situation.