Tax Return Audit Mathematical Error Correction – Paul Gaulkin CPA

Screen showing error messageWhen the IRS decides to audit a return, they have the ability to correct mathematical errors inside the Service Center when they process the return. The IRS has a program called the mathematical/clerical error abatement program which is designed to assess additional tax resulting from errors on a tax return. A key point to understand is that corrections made by the Service Center for mathematical errors are not subject to Notice of Deficiency procedures.

Defining a Mathematical Error

Typically a correspondence audit will go deeper and try to compare third party information with the tax return. A mathematical error is considered:

1. An error that is in addition, subtraction, multiplication, or division on a return

2. An incorrect use of any IRS table that is apparent from the information provided on the tax return

3. Any inconsistent entries on the tax return

4. An omission of information required to substantiate an entry on the return

Typically a corrective mathematical error will fall under these four provisions, but it is possible to have something that is very unusual corrected by the IRS.

Notifying the Taxpayer of a Correction

The IRS is obligated to notify the taxpayer of any mathematical error for which it intends to correct on their tax return. The notice will include an explanation of the mathematical error and give the taxpayer 60 days to request an abatement of the assessment of additional tax.

The IRS is unable to collect on the additional assessed tax until the taxpayer formally agrees to the assessment or the 60 day period has expired. In a case when the taxpayer chooses to dispute the summarily assessed amount, the IRS must abate the assessment and issue a Notice of Deficiency.

About Paul Gaulkin CPA

Paul Gaulkin is a Certified Public Accountant and enrolled with the U.S. Treasury to practice before the IRS. Mr. Gaulkin possesses unique technical knowledge in the process of securing relief for taxpayers nationwide with IRS and State tax problems. With an accounting degree from Florida International University, he is able to transform complex tax and accounting problems into easy to understand solutions.


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