Provide America’s

taxpayers top

quality service by

helping them

understand and

meet their tax

responsibilities

and by applying

the tax law with

integrity and

fairness to all.

The Examination Process

Introduction

The Internal Revenue Service (IRS) accepts most federal

returns as filed. Some returns, however, are examined, or

audited, to determine if income, expenses, and credits are

reported accurately.

This publication discusses general rules and procedures

we follow in examinations. It explains what happens before,

during, and after an examination. It also explains appeal and

payment procedures.

As a taxpayer, you have the right to fair, professional,

prompt, and courteous service from IRS employees, as

outlined in the Declaration of Taxpayer Rights found on

page 3.

We must follow the tax rules set forth by Congress in the

Internal Revenue Code. We also follow Treasury

Regulations, court decisions, and other rules and

procedures written to administer the tax laws.

If the examination results in a change to your tax liability,

you may ask us to reconsider your case. Some reasons why

we may reconsider your case include:

You are submitting additional information that could

result in a change to the additional amount we have

determined that you owe;

You are filing an original delinquent return after we have

determined that you owe an additional amount, or;

You are identifying a mathematical or processing error

we made.

You must request reconsideration in writing and submit it to

your local IRS office.

The IRS Mission

www.irs.gov

Publication 3498 (Rev. 11-2004) 

Catalog Number 73074S
What’s Inside . . .

Introduction

Declaration of Taxpayer Rights

What To Do if You Agree or Disagree

with the Examination Results

If You Agree

If You Do Not Agree

Fast Track Mediation Services

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Do you have questions or need help

right away? Call us. We are here to

help you.

For tax forms and publications:

1-800-829-3676

1-800-829-4059 /TDD

1-703-368-9694-Forms by Fax

For tax information and help:

Call the number on the bill you

received or call us toll free at:

1-800-829-1040 (for 1040 filers)

1-800-829-4933 (for business filers)

1-800-829-4059 /TDD

?

For General Information:

For information about a specific examination please

contact the person named on the appointment letter.

6

What to Do When You Receive a Bill

from the IRS ○○○○○○○○○○○○○○ ○○○○○

After the Examination

Payment Options

Temporarily Delay the

Collection Process

Innocent Spouse Relief

You Must Contact Us

What If You Believe Your Bill Is Wrong

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How Do You Appeal a Decision?

The Appeal System

Appeal Within the IRS

Making a Small Case Request

Filing a Formal Protest

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Internet: www.irs.gov

FTP - ftp.fedworld.gov/pub/

TELENET-iris.irs.gov

You’ll find answers to frequently asked

tax questions, tax forms on-line,

searchable publications, hot tax

issues, news, and help through e-mail.

You may also visit your nearest IRS Office.

You’ll find the exact address in your local

phone book under U.S. Government

If you prefer to write to us . .

Enclose a copy of your tax bill. Print

your name, social security number or

taxpayer identification number, and the

tax form and period shown on your bill.

Write to us at the address shown on

your tax bill.

Your Return Is Going To Be Examined

Before the Examination

During the Examination

Examinations by Mail

Examinations in Person

How to Stop Interest from Accumulating

Consents to Extend the Statute of

Limitations

Results of the Examination

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Privacy Act Statement 8

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Your Return Is Going To Be

Examined.

Declaration of Taxpayer Rights

Before the Examination

We accept most taxpayers’ returns as filed. If we inquire about your return

or select it for examination, it does not suggest that you are dishonest. The

inquiry or examination may or may not result in more tax. We may close

your case without change or you may receive a refund.

The process of selecting a return for examination usually begins in one of

two ways. One way is to use computer programs to identify returns that

may have incorrect amounts. The programs may be based on information

returns, such as Forms 1099 or W-2, on studies of past examinations, or

on certain issues identified by other special projects. Another way is to use

information from compliance projects that indicates a return may have

incorrect amounts. These sources may include newspapers, public

records, and individuals. If we determine the information is accurate and

reliable, we may use it to select a return for examination.

Publication 556, Examination of Returns, Appeal Rights, and Claims for

Refund, explains the rules and procedures that we follow in examinations.

The following sections give an overview of how we conduct examinations.

During the Examination

Examinations by Mail

If the examination is conducted by mail, you can:

1. Act on your own behalf. (In the case of a jointly filed return,

either spouse can respond or both spouses can send a

joint response.)

2. Have someone represent you in correspondence with us. This

person must be an attorney, accountant, enrolled agent, an

enrolled actuary, or the person who prepared the return and

signed it as the preparer. If you choose to have someone

represent you, you must furnish us with written authorization.

Make this authorization on Form 2848, Power of Attorney and

Declaration of Representative.

Some examinations are conducted entirely by mail. If the examination

is conducted by mail, you’ll receive a letter from us asking for

additional information about certain items shown on your return, such

as income, expenses, and itemized deductions.

Examinations in Person

An examination conducted in person begins when we notify you that

your return has been selected. We will tell you what information you 

need to provide at that time. If you gather the information before the

examination, we may be able to complete it more easily and in a

shorter time.

If the examination is conducted in person, it can take place in

your home, your place of business, an IRS office, or the office of

your attorney, accountant, or enrolled agent (a person enrolled to

practice before the IRS). If the time or place is not convenient for

you, the examiner will try to work out something more suitable.

Note: You may obtain any of the forms and publications

referenced in this publication by calling 1-800-829-3676.

VII. Appeals and Judicial Review

If you disagree with us about the amount of your tax

liability or certain collection actions, you have the right to

ask the Appeals Office to review your case. You may also

ask a court to review your case.

I. Protection of Your Rights

IRS employees will explain and protect your rights as a taxpayer

throughout your contact with us.

II. Privacy and Confidentiality

The IRS will not disclose to anyone the information you give us,

except as authorized by law. You have the right to know why we are

asking you for information, how we will use it, and what happens if

you do not provide requested information.

III. Professional and Courteous Service

If you believe that an IRS employee has not treated you in a

professional, fair, and courteous manner, you should tell that

employee’s supervisor. If the supervisor’s response is not

satisfactory, you should write to the IRS Director for your Area or

the Center where you file your return.

IV. Representation

You may either represent yourself or, with proper written authorization, have someone else represent you. Your representative must

be a person allowed to practice before the IRS, such as an attorney,

certified public accountant, or enrolled agent (a person enrolled to

practice before the IRS). If you are in an interview and ask to

consult such a person, then we must stop and reschedule the

interview in most cases.

You can have someone accompany you at an interview. You may

make sound recordings of any meetings with our examination,

appeal, or collection personnel, provided you tell us in writing 10

days before the meeting.

V. Payment of Only the Correct Amount of Tax

You are responsible for paying only the correct amount of tax due

under the law—no more, no less. If you cannot pay all of your tax

when it is due, you may be able to make monthly payments.

VI. Help with Unresolved Tax Problems

The Taxpayer Advocate Service can help you if you have tried

unsuccessfully to resolve a problem with the IRS. Your local

Taxpayer Advocate can offer you special help if you have a

significant hardship as a result of a tax problem. For more

information, call toll-free, 1-877-777-4778 (1-800-829-4059 for

TTY/TDD) or write to the Taxpayer Advocate at the IRS office

that last contacted you.

VIII. Relief from Certain Penalties and Interest

The IRS will waive penalties when allowed by law if you can show

you acted reasonably and in good faith or relied on the incorrect

advice of an IRS employee. We will waive interest that is the

result of certain errors or delays caused by an IRS employee.
4

Your Return Is Going To Be Examined. (cont.)

If the examination is conducted in person, you can:

1. Act on your own behalf. (In the case of a jointly filed return,

either spouse or both can attend the interview.) If you are

acting on your own behalf, you may leave to consult with your

representative. We will suspend the interview and reschedule

the examination. We cannot suspend the interview if we are

conducting it as a result of your receiving an administrative

summons.

2. Have someone accompany you, either to support your position

or to witness to the proceedings.

3. Accompany someone who will represent you. This person

must be an attorney, accountant, enrolled agent, an enrolled

actuary, or the person who prepared the return and signed it as

the preparer.

4. Have your representative act for you and not be present at the

audit yourself. If you choose to have someone represent you

in your absence, you must furnish us with written authorization.

Make this authorization on Form 2848, Power of Attorney and

Declaration of Representative.

During your examination, if you think you will owe additional tax at

the end of the examination, you can stop interest from accumulating

by paying all or part of the amount you think you will owe. Interest

will stop accumulating on the part you pay when the IRS receives

your money. Interest will only be charged on the tax, penalties, and

interest that are unpaid on the date they are assessed.

How to Stop Interest from Accumulating

Consents to Extend the Statute of

Limitations

We try to examine tax returns as soon as possible after they are filed, but

occasionally we may request that you extend the statute of limitations of

your tax return.

A return’s statute of limitation generally limits the time we have to

examine it and assess tax. Assessments of tax must be made within

3 years after a return is due or filed, whichever is later. We can’t

assess additional tax or make a refund or credit (unless you filed a

timely claim) after the statute of limitations has expired. Also, if you

disagree with the results of the examination, you can’t appeal the

items you disagree with unless sufficient time remains on the statute.

Because of these restrictions, if there isn’t much time remaining to

examine your return, assess additional taxes, and/or exercise your

appeal rights, you have the opportunity to extend the statute of

limitations. This will allow you additional time to provide further

documentation to support your position, request an appeal if you do

not agree with our findings, or to claim a tax refund or credit. It also

allows the Service time to complete the examination, make any

additional assessment, if necessary, and provide sufficient time for

processing.

If the statute of limitations for your tax return is approaching, you

may be asked to sign a consent. You may:

1. Refuse to extend the statute of limitations;

2. Limit or restrict the consent to particular issues, or

3. Limit the extension to a particular period of time.

A written agreement between you and the Service to extend the

statutory period of a tax return is called a “consent.” Consents can be

used for all types of tax except estate tax.

There are two basic kinds of consent forms. One sets a specific

expiration date for the extension, and the other for an indefinite period

of time. Either type of consent may be limited by restrictive conditions.

The use of a restricted consent is to allow the statute to expire with

regard to all items on the return except those covered by the restrictive

language.

The consent will be sent or presented to you with a letter

explaining this process and Publication 1035, Extending the

Tax Assessment Period. For further information, refer to this

publication.

Results of the Examination

If we accept your return as filed, you will receive a letter

stating that the examiner proposed no changes to your return.

You should keep this letter with your tax records.

If we don’t accept your return as filed, we will explain any

proposed changes to you and your authorized representative.

It is important that you understand the reasons for any

proposed changes; don’t hesitate to ask about anything that is

unclear to you.

What to Do When You Receive a Bill from

the IRS

You receive a tax 

bill in the mail.

Pay the full 

amount now . . .

 or . . . .

If it is correct . . . .

Gather copies of :

the bill

any records

tax returns, and

canceled checks

If it is not correct . . .

Contact us right away . . . 

Visit your local 

IRS Office

Write to us at 

the address on 

your bill.

You have several payment options . . .

Pay the full

amount now

See page 4. Pay by Credit Card

See page 7.

CREDIT

Pay in 

monthly installments

See page 7.

Apply for an 

Offer-in-Compromise

See page 7.

Seek a 

temporary delay.

See page 7.

1-800-829-1040 (for 1040 filers)

1-800-829-4933 (for business filers)

1-800-829-4059 /TDD

Call...
What To Do If You Agree or Disagree with the

Examination Results

5

If you do not respond to the 30-day letter,

or if you respond but do not reach an

agreement with an appeals officer, we will

send you a 90-day letter, also known as a

Notice of Deficiency. This is a legal

document that explains the proposed

changes and the amount of the proposed

tax increase. You will have 90 days (150

days if it is addressed to you outside the

United States) from the date of this notice

to file a petition with the Tax Court. If you

do not petition the Tax Court you will

receive a bill for the amount due.

For additional information, refer to Publication 3605, Fast Track

Mediation-A Process for Prompt Resolution of Tax Issues.

Fast Track Mediation Services

If you do not agree with any or all of the IRS findings, you may

request Fast Track Mediation services to help you resolve

disputes resulting from the examination (audits). Fast Track

Mediation offers an expedited process with a trained mediator,

who will help facilitate communication, in a neutral setting. 

The mediator will work with you and the IRS to understand the

nature of the dispute. The purpose is to help the two of you 

reach a mutually satisfactory resolution that is consistent with

the applicable law. The mediator has no authority to require

either party to accept any resolution. You may withdraw from 

the mediation process anytime. If any issues remain unresolved

you will retain all of your usual appeal rights.

Most cases qualify for Fast Track Mediation. To begin the

process, you may request the examiner or IRS representative

to arrange a mediation meeting. Both you and the IRS

representative must sign a simple Agreement to Mediate form.

A mediator will then be assigned. Generally, within a week,

the mediator will contact you and the IRS representative to

schedule a meeting. After a brief explanation of the process,

the mediator will discuss with you when and where to hold the

mediation session.

If You Agree

If you agree with a proposed increase to tax, you can sign an

agreement form and pay any additional tax you may owe. You

must pay interest and applicable penalties on any additional

balance due. If you pay when you sign the agreement, interest

is generally figured from the due date of your return to the date

of your payment.

 If you do not pay the additional tax and interest, you will

receive a bill (See “What To do When You Receive a Bill from

the IRS” on page 4.) If the amount due (including interest and

applicable penalties) is less than $100,000 and you pay it

within 21 business days, we will not charge more interest or

penalties. If the amount is $100,000 or more, the period is

reduced to 10 calendar days. If you can’t pay the tax due at

the end of the examination, you may pay whatever amount you

can and request an installment agreement for the balance.

(See “Setting up an Installment Agreement” on page 7.)

If you are entitled to a refund, you will receive it sooner if you

sign the agreement form at the end of the examination. You

will also be paid interest on the refund.

If You Do Not Agree

If you do not agree with the proposed changes, the examiner

will explain your appeal rights. If your examination takes place

in an IRS office, you may request an immediate meeting with

the examiner’s supervisor to explain your situation. You may

also enter into an Agreement to Mediate to help resolve

disputes through Fast Track Mediation services. (See next column.)

Mediation can take place at this meeting or afterwards. If an

agreement is reached, your case will be closed.

If you cannot reach an agreement with the supervisor at this

meeting, or if the examination took place outside an IRS office

or was conducted through correspondence with an IRS Campus

employee, the examiner will prepare a report explaining your

position and ours. The examiner will forward your case to the

Area office for processing .

You will receive:

You generally have 30 days from the date of the 30-day letter

to tell us whether you will accept the proposed changes or

appeal them. The letter will explain what steps you should

take, depending on what action you choose. Be sure to follow

the instructions carefully. Appeal rights are explained following

this section.

y A letter (known as a 30-day letter) notifying you of your

rights to appeal the proposed changes within 30 days,

y A copy of the examiner’s report explaining the proposed

changes, and

y An agreement or a waiver form.
y If the total amount of tax, penalties, and interest for any tax

period is more than $25,000;

y In all partnership and S corporation cases, regardless of the

dollar amount;

y In all employee plan and exempt organization cases,

regardless of the dollar amount;

y In all other cases, unless you qualify for other special

appeal procedures, such as requesting appeals consideration

of liens, levies, seizures, or installment agreements.

(See Publication 1660, Collection Appeal Rights, for more information

on special collection appeals procedures.)

How Do You Appeal a Decision?

6

Be sure to send the protest within the time

limit specified in the letter you received.

When a formal protest is required, send it within the time limit

specified in the letter you received. Include in your protest:

y Your name and address, and a daytime telephone number.

y A statement that you want to appeal the IRS findings to the

Appeals Office.

y A copy of the letter showing the proposed changes and

findings you do not agree with (or the date and symbols from

the letter.)

y The tax periods or years involved.

y A list of the charges that you do not agree with, and why

you do not agree.

y The facts supporting your position on any issue that you do

not agree with.

y The law or authority, if any, on which you are relying.

y You must sign the written protest, stating that it is true, under

the penalties of perjury as follows:

“Under the penalties of perjury, I declare that I examined the

facts stated in this protest, including any accompanying

documents, and, to the best of my knowledge and belief,

they are true, correct, and complete.”

Filing a Formal Protest

If your representative prepares and signs the protest for you, he

or she must substitute a declaration stating:

y That he or she submitted the protest and accompanying

documents and;

y Whether he or she knows personally that the facts stated in

the protest and accompanying documents are true and

correct.

We urge you to provide as much information as you can, as this

will help us speed up your appeal. This will save you both time

and money.

Additional information about the Appeals process may be found

in Publication 5, Your Appeals Rights and How to Prepare a

Protest if you Don’t Agree.

Because people sometimes disagree on tax matters, the

Service has an appeal system. Most differences can be

settled within this system without going to court.

Your reasons for disagreeing must come within the scope of

tax laws, however. For example, you cannot appeal your

case based only on moral, religious, political, constitutional,

conscientious, or similar grounds.

If you do not want to appeal your case within the IRS, you

may take your case directly to tax court.

Appeal Within the IRS

You may appeal our tax decision to a local appeals office,

which is separate and independent of the IRS Office taking

the action you disagree with. An appeals office is the only

level of appeal within the IRS. Conferences with Appeals

Office personnel may be conducted in person, through

correspondence, or by telephone with you or your authorized

representative

If you want to have a conference with an appeals officer,

follow the instructions in the letter you received. We will send

your conference request letter to the appeals office to

arrange for a conference at a convenient time and place.

You or your qualified representative should be prepared to

discuss all disputed issues at the conference. Most

differences are settled at this level. Only attorneys, certified

public accountants or enrolled agents are allowed to

represent a taxpayer before Appeals. An unenrolled

preparer may be a witness at the conference, but not a

representative.

If you want to have a conference with an appeals

officer, you may also need to file either a small case

request or a formal written protest with the contact

person named in the letter you receive. 

The Appeal System

Whether you file a small case request or a formal written 

protest depends on several factors.

You may make a small case request if the total amount of

tax, penalties, and interest for each tax period involved is

$25,000 or less, and you do not meet one of the exceptions

below for which a formal protest is required. If more than one

tax period is involved and any tax period exceeds the $25,000

threshold, you must file a formal written protest for all periods

involved. The total amount includes the proposed increase or

decrease in tax and penalties or claimed refund. For an

Offer-in-Compromise, include total unpaid tax, penalty, and

interest due.

Making a Small Case Request

To make a small case request, follow the instructions in our

letter to you by sending a brief written statement requesting an

appeals conference. Indicate the changes you do not agree

with and the reasons you do not agree with them.

You must file a formal written protest
After the Examination

7

If you want to pay off your tax debt through an installment

agreement, call the number shown on your bill. If you owe:

y $25,000 or less in tax, we will tell you what you need to do

to set up the agreement;

y More than $25,000, we may still be able to set up an

installment agreement for you, but we may also ask for

financial information to help us determine your ability to

pay.

Even if you set up an installment agreement, we may still file a

Notice of Federal Tax Lien to secure the government’s interest

until you make your final payment.

Note: We cannot take any collection actions affecting your

property while we consider your request for an installment

agreement, while your agreement is in effect, for 30 days after

we reject your request for an agreement, or for any period while

you appeal the rejection.

If you arrange for an installment agreement, you may pay with:

y Personal or business checks, money orders, or certified

funds (all made payable to the U.S. Treasury),

y Credit and debit cards,

y Payroll deductions your employer takes from your salary

and regularly sends to IRS, or

y Electronic transfers from your bank account or other similar

means.

You cannot pay all that you owe now

If you cannot pay all your taxes now, pay as much as you can. By

paying now, you reduce the amount of interest and penalty you

owe. Then immediately call, write, or visit the nearest IRS office to

explain your situation. After you explain your situation, we may ask

you to fill out a Collection Information Statement. If you are

contacting us by mail or by telephone, we will mail the statement to

you to complete and return to us. This will help us compare your

monthly income with your expenses so we can figure the amount

you can pay. We can then help you work out a payment plan that

fits your situation. This is known as an installment agreement.

Payment by credit card

Payment Options

Apply for an Offer-in-Compromise

In some cases, we may accept an Offer-in-Compromise to

settle an unpaid tax account, including any penalties and

interest. With this kind of arrangement, we can accept less

than the full amount you owe when it is doubtful we will be able

to collect the entire amount due.

Offers in compromise are also possible if collection action

would create an economic hardship. You may want to discuss

these options with your examiner.

Temporarily Delay the Collection

Process

If we determine that you can’t pay any of your tax debt, we

may temporarily delay collection until your financial condition

improves. You should know that if we delay collecting from

you, your debt will increase because penalties and interest are

charged until you pay the full amount. During a temporary

delay, we will again review your ability to pay. We may also file

a Notice of Federal Tax Lien, to protect the government’s

interest in your assets. See Publication 594, The IRS

Collection Process.

Individual taxpayers may make credit (and debit) card payments on

tax liabilities (including installment agreement payments) by phone

or Internet. Payments may be made to the United States Treasury

through authorized credit card service providers.

The service providers charge a convenience fee based on the

payment amount. You will be informed of the convenience fee

amount before the credit card payment is authorized. This fee is in

addition to any charges, such as interest, that may be assessed by

the credit card issuer. Visit www.irs.gov to obtain a list of authorized service providers and to obtain updated information on credit

card payment options.

Note: You can use debit cards issued by VISA and MasterCard

when making tax payments through the participating service

providers. However, the service providers and card issuers treat

debit cards and credit cards equally for the purpose of processing

electronic tax payments. Therefore, debit card users are charged

the same fee traditionally associated with credit card transactions

EFTPS is an Electronic Federal Tax Payment System developed

by the Internal Revenue Service and Financial Management

Service (FMS).

The system allows federal taxes to be paid electronically. The

system allows the use of the Internet at www.eftps.gov or

telephone to initiate tax payments directly. EFTPS payments may

also be made through your local financial institution. The service

is convenient, secure and saves time.

You may enroll in EFTPS through the website at www.eftps.gov or

by completing a form available from EFTPS customer service at

(800) 555-4477 or (800) 945-8400.

Payment by Electronic Federal Tax

Payment System (EFTPS)

Setting up an installment agreement

Installment agreements allow you to pay your full debt in smaller, more

manageable amounts. Installment agreements generally require equal

monthly payments. The amount and number of your installment

payments will be based on the amount you owe and your ability to pay

that amount within the time we can legally collect payment from you.

You should be aware, however, that an installment agreement

is more costly than paying all the taxes you owe now. Like

revolving credit arrangements, we charge interest on the

unpaid portion of the debt. Penalties also continue to

accumulate on installment agreements.
If you believe your bill is wrong, let us know as

soon as possible. Call the number on your

bill, write to the IRS office that sent you the

bill, call 1-800-829-1040 (for 1040 filers),

1-800-829-4933 (for business filers),

1-800-829-4059 /TDD, or visit your local IRS

office.

What If You Believe Your Bill is

Wrong

8

You Must Contact Us

It is important that you contact us regarding any correspondence you receive from us. If you do not pay your bill or

work out a payment plan, we are required by law to take

further collection actions.

Innocent spouse relief and separation of liability apply only

to items incorrectly reported on the return. If a spouse does

not qualify for innocent spouse relief or separation of liability,

the IRS may grant equitable relief.

Each type of relief is different and each has different

requirements. You must file Form 8857, Request for

Innocent Spouse Relief, to request any of these methods of

relief. Publication 971, Innocent Spouse Relief, explains

each type of relief, who may qualify, and how to request

relief.

To help us correct the problem, gather a copy of the bill along with

copies of any records, tax returns, and canceled checks, etc., that

will help us understand why you believe your bill is wrong.

If you write to us, tell us why you believe your bill is wrong. With

your letter, include copies of all the documents you gathered to

explain your case. Please do not send original documents. If we

find you are correct, we will adjust your account and, if necessary,

send you a corrected bill.

Innocent Spouse Relief

If you filed a joint tax return, you are jointly and individually responsible

for the tax and any interest or penalty due on the joint return, even if

you later divorce. In some cases, a spouse may be relieved of the 

tax, interest, and penalties on a joint return.

y Separation of liability - may apply to joint filers who

are divorced, widowed, legally separated, or have not

lived together for the past 12 months;

y Equitable relief - applies to all joint filers.

y Innocent spouse relief - may apply to all joint filers;

You can ask for relief no matter how small the liability.

Three types of relief are available.

The Privacy Act of 1974 says that when we ask you for

information, we must first tell you our legal right to ask for the

information, why we are asking for it, and how it will be used.

We must also tell you what could happen if you do not provide it

and whether or not you must respond under the law.

This notice applies to tax returns and any papers filed with

them. It also applies to any questions we need to ask you so we

can complete, correct, or process your return; figure your tax;

and collect tax, interest, or penalties.

Our legal right to ask for information is found in Internal

Revenue Code sections 6001, 6011, and 6012(a), and their

regulations. They say that you must file a return or statement

with us for any tax you are liable for. Your response is mandatory under these sections.

Code section 6109 and its regulations say that you must show

your social security number or individual taxpayer identification number on what you file. You must also fill in all parts of

the tax form that apply to you. This is so we know who you are,

and can process your return and papers. You do not have to

check the boxes for the Presidential Election Campaign Fund.

We ask for tax return information to carry out the U.S. tax laws.

We need it to figure and collect the right amount of tax.

We may give the information to the Department of Justice and

to other Federal agencies, as provided by law. We may also

give it to cities, states, the District of Columbia, and U.S.

Commonwealths or possessions to carry out their tax laws.

And we may give it to certain foreign governments under tax

treaties they have with the United States.

We may also disclose this information to Federal, state, or

local agencies that investigate or respond to acts or threats of

terrorism or participate in intelligence or counterintelligence

activities concerning terrorism.

If you do not file a return, do not give us the information we

ask for, or provide fraudulent information, the law says that we

may have to charge you penalties and, in certain cases, subject

you to criminal prosecution. We may also have to disallow the

exemptions, exclusions, credits, deductions, or adjustments

shown on your tax return. This could make your tax higher or

delay any refund. Interest may also be charged.

Please keep this notice with your records. You may want to refer

to it if we ask you for other information. If you have questions

about the rules for filing and giving information, please call or

visit any Internal Revenue Service office.

Privacy Act Statement

After the Examination (cont.)