A revenue officer just left a voicemail for your client. She owes $84,000 in 2023 payroll tax, the State Department flagged her passport, and she also got an audit notice for a 2021 return she swears was clean. Three collection streams, three different remedies, three different statutes.
Audit reconsideration is an informal IRS process to revisit a closed assessment from an examination when the taxpayer presents new information or contests an SFR (Substitute for Return) under §6020(b). It is not a formal Appeals procedure. It is a request for the originating office to look again.
Availability checklist:
- Assessment came from an examination (deficiency procedure) or an SFR
- Taxpayer has new documentation not previously considered, OR did not appear at the original examination
- Taxpayer still owes a balance (cannot have paid in full; that case becomes a refund claim instead)
Not available when:
- Tax Court already decided the case (res judicata)
- Taxpayer signed a Form 866 or Form 906 closing agreement
Common mistakes
- Confusing the statutory lien with the NFTL. The §6321 lien arises automatically at assessment + 10 days. The §6323 NFTL is the public filing that establishes priority against third parties. Trap answer: "the lien arises when the NFTL is filed."
- Granting AFSP-level practitioners CDP representation at Appeals. Appeals is unlimited-practice turf. An AFSP participant cannot represent at the CDP hearing even if they prepared the underlying return. Trap answer: "AFSP can attend CDP because they prepared the return."
- Misstating the refund-claim window as a flat 3 years. It is the later of 3 years from filing or 2 years from payment, and the lookback caps the recoverable amount. Trap answer: "claim must be filed within 3 years of the return, period."
Bottom line
- CSED is 10 years from assessment under §6502; tolled by pending OIC, CDP, IA requests, bankruptcy (plus 6 months), and 6-month foreign absences
- Statutory lien arises automatically (§6321) after assessment + notice and demand + 10-day default; the NFTL (§6323) is the public filing perfecting priority and triggers 30-day CDP under §6320
- Final Notice of Intent to Levy + CDP rights (Letter 1058/LT11) = 30 days; Form 12153 preserves Tax Court jurisdiction. Bank levies hold 21 days, wage levies are continuous
- TFRP under §6672 = 100% of unpaid trust fund taxes on willful, responsible persons; Form 4180 interview, Letter 1153, Form 2751, 60-day Appeals protest
Exam shortcut
30-30-60 rule: 30 days to request CDP after Letter 1058 or §6320 NFTL notice; 30 days to petition Tax Court after Notice of Determination; 60 days to protest a Letter 1153 TFRP to Appeals. Refund window pick: later of 3 years from filing or 2 years from payment. If the question says "no return was filed," use the 2-year-from-payment rule only.
The full lesson (about 3,670 words, 24 min read) adds 2 worked examples, all 6 common mistakes, a self-check, free in the app.
Learning objectives
- 1
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