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IRS audits and state audits are intended to be used by the government to verify that taxpayers have correctly reported their tax obligations. There are a number of legal, procedural, policy, and other requirements that must be followed by the IRS and the taxpayer during the course of the audit. It is imperative that the taxpayer follow and/or enforce these rules or, as a matter of strategy, not follow or enforce some of the rules.

4. If the IRS owes the taxpayer a refund, the general rule is that the taxpayer has to file a refund claim with the IRS, wait for the IRS to disallow the claim, and then, within two years of the date the claim is disallowed, file suit to recoup the refund.

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