Generally speaking, an examination begins with the inspection of the taxpayer's books and records. It is also possible to initiate an examination based on oral inquiries; however, inspection of books and records and oral inquiries may not constitute an examination in the following instances:
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Survey of a Joint Committee Case
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Third-party or related-party contact
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Inspection of prior or subsequent year records as they relate to another year under examination
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A request for documents under Revenue Procedure 94-69 (See Revenue Procedure 2005-32)
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Accelerated Issue Resolution
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Advance Pricing Agreement program
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Pre-Filing Agreement program
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Industry Issue Resolution program.
A return placed under examination will remain under examination until there is a terminating event such as:
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Issuance of a no-change letter
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Issuance of a Statutory Notice of Deficiency
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Petition to a Court of Jurisdiction
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Assessment date that reflects the final determination of tax and the final administrative appeals consideration
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Expiration of Statute of Limitations, generally; exceptions can be made for fraud, malfeasance, or misrepresentation of a material fact
For more information, click on What Occurs During an Examination.
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