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Indicate how long the IRS can take to propose changes to the income tax return in...

Indicate how long the IRS can take to propose changes to the income tax return in normal circumstances

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Expert Solution

After a Form 1120 or Form 1041 is filed with the IRS,
the IRS processes the return, by comparing items such as income, credits and deductions as reported on the return filed,so as to match them with relevant available with third party-records like banks.
and if any discrepancy is found by the IRS,
The IRS sends a Letter 2030 to propose changes to the figures mentioned in the submitted- return ,based on the discrepancy noted by it.
There is no need to file an amended return,but
only inform the IRS within 45 days ,whether we agree or disagree to the proposed change
We can either dispute or pay the taxes as mentioned.
If the tax is not contested within 90 days in any Court of Law, the IRS will send the bill for taxes to be paid (based on changes proposed)along with penelties/interest.
But before sending Letter 2030 -of proposed changes in the return--which will decide the tax liability--
normally,IRS takes not less than 8 months to complete review of the returns filed--as they are able to receive third-party confirmations /informations only after end of tax years on Dec.31,from concerned parties.
So,it may take a time-frame anywhere, after these 8 months, for IRS to propose changes to the income tax return in normal circumstances--ie.in any case, not before 8 months, normally.

ekkarill92 answered 1 year ago
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