Why does the IRS audit?
A tax audit is an IRS investigation into the financial records of an individual or business for the purpose of enforcing current tax laws. Audits can be triggered by improper filing, inaccurate reporting, attempted tax evasion and other discrepancies discovered in a tax return. The discrepancies cause the IRS to question that the information on a tax return might be incorrect or misrepresented by the taxpayer and demand further examination.
If the results of the audit indicate that there were, in fact, no errors on the original return, then no further action is required on the part of the taxpayer. If the audit determines that false or incorrect information was reported, however, then the taxpayer is responsible for locating and submitting any required documentation and paying any owed funds and applicable interest to the IRS.
What Kinds of Audits Are There?
- Correspondence Audit
A correspondence audit is generally the most uncomplicated, straight-forward type of audit the IRS can perform. typically, the IRS sends the taxpayer a written request requiring the taxpayer to produce relevant receipts, cancelled checks and other such documentation that provide additional information regarding a specific area on the tax return. Documentation and communication regarding a correspondence audit is usually managed via the postal service.
- Office Audit
An office audit occurs at the taxpayer's local IRS office. The IRS will request specific documents to be brought to the office to perform the audit in person. The documents will be used to determine the taxpayer's compliance with tax laws in regard to lawful income reporting and the correct amount of taxes paid or owed.
- Field Audit
A field audit involves an IRS representative coming to the taxpayer's home, place of business or the office where the tax return was prepared for the purpose of conducting a face-to-face investigation of the return. A field audit is considered a more serious, comprehensive review of the taxpayer's return.
- Taxpayer Compliance Measurement Program Audit
A Taxpayer Compliance Measurement Program Audit is the most exacting process a taxpayer can face and requires an extensive investigation into the entire tax return. Documents must be acquired to substantiate all the data on the tax return, including birth certificates, marriage licenses, receipts, cancelled checks, etc. The results of these audits are compiled for statistical purposes.
What Are the Benefits of Having a Tax Attorney Involved Before and During an Audit Process?
A tax attorney can explain the taxpayer's rights and what to expect during the audit process. It is beneficial to have a tax attorney present for certain reviews, such as field and TCMP audits. An attorney can advise the client on important questions to ask the IRS regarding the type of audit being done, which specific documents are required to be produced, options for reimbursement and other factors relating to the case.
They can also ensure that the taxpayer does not give the IRS unnecessary documents or information unrelated to the specific investigation, which could potentially create additional problems for the taxpayer, such as another audit. Depending on the type of audit being done, the tax attorney can be present for the auditing process with the client and the IRS representative to ensure the taxpayer's rights are protected. If a taxpayer moves forward with the audit without legal representation, the auditing process can be stopped at any time for the person to obtain legal services.
Why Work With Our Law Firm?
Our law firm has years of experience in handling tax resolution and possesses extensive knowledge on current tax laws. We are profficient in the tax process, including the programs available with the IRS for negotiating debt settlement.
Our tax attorneys recognize that each client comes to us with financial circumstances specific to that particular taxpayer. We take into account the client's employment status, income, tax debts and financial abilities and limitations. These factors directly influence the course of action the client will be advised to take.
We are prepared to handle a variety of IRS-related situations. We can negotiate circumstances involving property leans, levies, off-shore bank accounts, payroll trust fund complications, back tax debt issues, delinquent tax returns, etc. Our tax attorneys can advise clients on how to organize and gather documentation requested by the IRS. Professional guidance simplifies the steps and allows the auditing process to happen as smoothly as possible.
Our law firm will prepare the client for the audit by answering questions about audit types and the processes involved. The client should refrain from volunteering information in the audit, and we protect the client's rights by determining what does and does not need to be produced in the audit. We can also advise clients on what to do in the event that requested receipts or documentation have been lost or cannot be located.
If the results of the audit determine that money is owed to the IRS, we can negotiate the terms of the reimbursement to make the process more manageable for the client. This can be done several ways: offer and compromise, payment arrangements, penalty abatement or IRS bankruptcy filing. We can also help in situations needing to declair an innocent spouse or if an appeal needs to be filed.
We understand that facing a tax audit is stressful, confusing and overwhelming. We have multiple offices to ensure convenient access to our experienced attorneys. With our extensive expertise, we can provide clients with the legal protection necessary for dealing with any type of IRS or tax concern.