IRS Tax Audits
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IRS Audit and Audit Representation
IRS audit rates are rising dramatically for all types of taxpayers. Within the past few years, the IRS audit rate for individual taxpayers has risen more than 25%, and the audit rate for high-income taxpayers has doubled.
An audit by the IRS can be a daunting experience for even the most financially savvy individual. Your tax returns can be chosen for an audit due to a number of reasons. An audit is a lengthy process and the IRS will carefully scrutinize all your finances. You will be called upon to explain all of your finances and to prove the validity of business expenses and write offs.
Typically, the audit process begins when you receive a letter stating that your tax return has been selected for an examination. This does not mean that the IRS is accusing you of lying, cheating on your tax return, or engaging in any other wrongdoing.
However, the goal of the IRS audit process is to increase the tax compliance and revenue collected by the government.
If your income tax return has been selected for an audit and you don’t know why, it could very possibly be that the computer simply selected your number for audit. Or potentially your business is part of a compliance test program
Whatever the reason, the IRS has contacted you for an audit, you are a bit concerned, and you want to know how to stop the audit. But that doesn’t necessarily mean it’s time to panic. Sometimes all the IRS requires are some missing documents, which is the reason for the audit and providing them may stop the audit from going any further. In any case, there are a few different kinds of audits and each occurs at different locations, which are good indicators as to how severe the audit is. Since the IRS can audit you by mail, in their offices, or in your office or home, the location is very telling.
Call today at 1(888) 829-9200 to see if you need a tax professional to represent you for an IRS Tax Audit!
Our team works hard and deligently to research all possible resolution:
- Detect Tax Errors
- Audit Reconsideration
- Tax Return Amendments
A thorough financial analysis review to determine specific resolution plan:
Additional information on "IRS Tax Audits"
Office Audits - Notice of an Office Audit will probably arrive by mail and may require that you identify specific items on the return that are in question. You or your representative may be required to bring certain documents such as bank records to your local IRS office for examination. This allows the IRS to check for unreported income. Generally speaking, IRS office audits are performed with a Tax Examiner who will request various documents and explanations of deductions.
Correspondence Audits - The first and usually the least severe is a Correspondence Audit. Generally speaking, a correspondence audit comes about if there are missing documents in your tax return. Often these include W-2's, and 1099 income items or interest expense items. The IRS Service Center will request that you send in copies of canceled checks or receipts so as to verify certain deductions. This type of audit is usually reserved for simple tax returns. The need for correct documentation is usually handled through the mail.
At-Home Audits - When an IRS audit is scheduled at your home or office it should be considered as serious. The agents handling these types of audits have received a great deal of training beyond the typical Tax Examiner. Naturally, during any type of auditing, it can lead to audits of other tax years and other tax deductions. For that reason, it’s best to hire an expert who can dynamically defend your rights.
While the auditor’s function is to insure compliance with the law, many government auditors are often pressed for time so they don’t always perform a comprehensive review of all appropriate documents. Plus, it’s often difficult for an auditor to be objective, assuring the taxpayer of his or her rights.
In fact, it is commonplace for an auditor to request information without explaining how the information will be used, plus they may even forget to explain what might happen if the taxpayer doesn’t have the information. Based on these issues, an error can occur on the part of the auditor and as a result, a mistaken assessment along with potential fraud penalties costing the taxpayer thousands of dollars. Never take chances with the IRS. Hire an expert who will make sure your rights are vehemently defended.
Audit Reconsideration - Audit reconsideration is an IRS administrative procedure that allows a taxpayer to dispute the results of an assessment made because of an audit of taxpayer's return or of a substitute return filed by the IRS on behalf of the nonfiling taxpayer.
The IRS has the authority to abate part or all of any assessment if:
- The assessment is in excess of the correct tax liability
- The assessment is made subsequent to the expiration of the applicable period of limitations or
- The assessment was erroneously or illegally made
The IRS will not accept an audit reconsideration if:
The taxpayer has already signed an agreement agreeing to pay the amount owing. Those agreements include:
- Closing agreement
- Offer in Compromise
- Form 870AD with the Appeals Office
The U.S. Tax Court or another court has issued a final determination on the tax liability.
Audit Appeals Right - As part of our phase one case analysis and investigation and 800tax Solutions has determined that there is a legitimate claim for a disagreement on your tax bill, our team of tax attorneys will represent you through out the appeals process.
Appeal Rights are explained by the examiner at the beginning of each audit. Taxpayers who do not agree with the proposed changes may appeal by having a supervisory conference with the examiner’s manager or appeal their case administratively within the IRS, to the U.S. Tax Court, U.S. Claims Court or the local U.S. District Court.
If there is no agreement at the closing conference with the examiner or the examiner’s manager, the taxpayer has 30 days to consider the proposed adjustments and their next course of action. If the taxpayer does not respond within 30 days, the IRS issues a statutory notice of deficiency, which gives the taxpayer 90 days to file a petition to the Tax Court.
The Claims Court and District Court generally do not hear tax cases until after the tax is paid and administrative refund claims have been denied by the IRS. The tax does not have to be paid to appeal within the IRS or to the Tax Court. A case may be further appealed to the U.S. Court of Appeals or to the Supreme Court, if those courts accept the case.
You have the right to be treated professionally, fairly, promptly, and courteously by IRS employees and Private Collection Agencies (PCAs) contacting you on behalf of the IRS. Among other rights, you have the right to:
- Disagree with your tax bill,
- Meet with an IRS manager if you disagree with the IRS employee who handles your tax case,
- Appeal most IRS collection actions,
- Have your case transferred to a different IRS ofice if you have a valid reason (such as if you move),
- He represented by someone when dealing with IRS matters, and
- Receive a receipt for any payment you make.