IRS Tax Audit Representation for Your Defense

Tax Audit Representation

Being selected for an IRS tax audit is every taxpayer’s nightmare when filing taxes. The Internal Revenue Service audited 626,204 tax returns during the 2021 tax year, and despite what many individuals believe, you don’t have to be a millionaire or in a high-income bracket to be selected for an IRS audit.

If you are notified that your tax return is being given a closer look, you will want to seek an IRS tax audit representation lawyer to help you navigate this challenging situation. Even if you’ve done nothing wrong and are confident that your taxes are in order, you’ll want a professional to represent you against the IRS. 

There are a few key things that the IRS (and most state tax auditors) will look for when they’re doing an audit:

• Inaccurate or false information: This is probably the most common reason that people end up being audited. If you accidentally put the wrong number on your return, it’s not a huge deal. But if you deliberately put false information, that’s a different story.
• Not reporting all of your income: The IRS gets copies of 1099s and W-2s, so they know how much money you should have reported on your return. If you don’t report all of it, that’s a red flag.
• Claiming excessive deductions: Everyone wants to maximize their deductions, but if you’re claiming more than is reasonable, that will raise eyebrows.
• Failing to file a return: This one is pretty self-explanatory. If you don’t file a return at all, the IRS is going to come looking for you.

What Happens During an IRS Audit?

While the words “you’ve been selected for a tax audit” may make you picture the IRS kicking down your front door to demand your financial statements, the reality isn’t quite as dramatic. However, just because the audit process may not be as terrifying as you imagined doesn’t mean you shouldn’t seek tax audit representation. Saying the wrong thing can open you up to further investigation, and it’s easy to say something that sounds suspicious, especially if you’re nervous.

There are several types of IRS audits, and which one you are selected for will determine how the audit occurs. Different IRS tax audits bring different levels of scrutiny, but regardless of which audit you receive, the IRS will be taking a closer look at your tax return and finances. Consider consulting IRS audit representation services about the best way to proceed. 

Correspondence Audits

Correspondence audits take place via written communication through the mail. Although dealing with the IRS through the mail may seem less intimidating than dealing with them in person, things aren’t always as straightforward as they seem. 

Simple Letter

Sometimes the IRS or state will send you a letter to inform you that you owe additional taxes. This letter is not an outright audit, but it can easily evolve into one if not handled appropriately. 

When you receive a simple letter, you can agree that you made an error and pay the tax bill. Alternatively, you can protest the bill and arrange to have the issue examined more closely by an IRS agent and seek the services of a tax lawyer.

Audit Letter

Another type of letter the Internal Revenue Service may send you is an audit letter. This letter is an actual audit and requests missing documents to support the information supplied on your tax return. For example, the documents requested could be a receipt for a purchase claimed as a deduction or a record from a charity you claimed to donate to on your tax return. 

Sometimes fixing tax issues can be as simple as providing the necessary documents. Other times you may not have the paperwork required to support your claim. A tax audit representative can help you achieve a favorable outcome and ensure that you supply the appropriate documents, and resolve your issue with the IRS entirely.

Office Audit

During an office audit, the IRS will interview you in person about an aspect of your return. You will be summoned to an IRS office where the auditing process will occur. 

This audit type is more serious than a correspondence audit. IRS tax audit representation services are recommended to ensure that your rights as a taxpayer are protected throughout the review.

Field Audit

Field audits are nerve-wracking, as they involve IRS agents coming to your accountant’s office, home, or workplace (for small business owners). However, unlike an office audit, where you are meeting to discuss a specific element of your return, field audits are not limited in what tax matters they investigate. 

You can expect IRS employees to review your financial information carefully and ask you to explain anything that appears out of place or doesn’t have appropriate documentation. Having a tax attorney experienced in IRS tax representation to guide you through the audit process is advised. If the agent finds any tax problems, having an IRS audit representative already working with you will keep you from having to find a good tax attorney in a hurry if things escalate. 

Line-by-Line Audit

Line-by-line audits are the most intense type of audit the IRS completes. While these audits are infrequent, when you are selected for one, every single number on your tax return will be scrutinized closely. From your reported income to your claimed business expenses, a line-by-line tax examination will look for errors in your filing. 

Unsurprisingly, many returns will have errors when placed under such close inspection. Hiring tax audit representation allows a tax or legal professional to manage the audit for you. Your tax professional typically attends the audit and handles correspondence with the IRS.

What Does an IRS Tax Attorney Do?

Hiring an IRS tax representative is a good way to play it safe if you are being audited. This service is called audit defense, or audit representation, and a legal professional stands in on your behalf during an audit. The tax representative will deal with the taxing authority running the audit and defend the taxpayer’s position(whether the taxpayer is an individual or legal entity). 

Having IRS tax audit representation services present for your income tax audit prevents your legal rights from being infringed upon and ensures that someone knowledgeable about tax codes and regulations is looking out for your best interests. The tax professional you work with will help you compile the documents requested by the IRS, initiate the appeals process to lower your debt, and help you resolve unfiled tax returns. The Taxpayer Bill of Rights allows you to hire IRS audit representation as well as representation for other tax issues.

Tax Attorneys vs. Other Tax Professionals

In addition to tax attorneys, tax professionals with specific credentials can complete IRS audit representation, such as CPAs and IRS enrolled agents. Although an authorized representative can represent taxpayers during an IRS audit, they cannot provide the legal guidance that can be the crucial difference between successful and unsuccessful IRS representation. 

When you need tax audit representation, choose to work with a tax attorney over other tax professionals to ensure that the person completing your audit representation isn’t just knowledgeable about taxes but can also offer you legal representation. If the IRS attempts to claim that the errors on your tax returns are intentional, you’ll need the full audit representation and legal representation that only a legal tax professional can provide.

Why Was I Selected for a Tax Audit?

Errors

One of the most common reasons the IRS might take a closer look at your return is if the amount you claim in income doesn’t match what is on your 1099 or W-2. Another frequently seen mistake that can prompt an IRS audit is if separated parents both claim their child on their tax return.

Then there are more nefarious errors, such as a business owner knowingly claiming deductions that aren’t appropriate. In all these situations, the IRS will pursue additional taxes to recover the money they are owed and minimize the tax gap, which is the difference between the amount of money the IRS receives and the amount they should receive. Tax audit representation is a valuable resource in any of these situations, as your IRS tax representative can help you resolve errors without drawing further scrutiny from the IRS.

Unfiled Returns

If you’ve managed to fly under the radar with unfiled tax returns until recently, you may have thought that your missed returns were overlooked. Unfortunately, since there is no statute of limitations on a late filed return, just because it’s been a few years doesn’t mean you won’t be contacted regarding those skipped returns. 

The best thing you can do is file your missed taxes as soon as possible before you come under tax examination by the IRS. If the IRS contacts you before you can file the overdue returns, seek IRS audit representation immediately. 

Random Selection

Sometimes you may be selected for an audit by chance. Tax authorities conduct a number of random audits each tax year for compliance purposes. The IRS conducts a National Research Program and develops “norms” by collecting data from randomly selected returns. This data collection is why you may be selected for an audit, even if there was nothing suspicious about your return. 

How We Navigate IRS Audit Representation

Our firm is highly experienced in navigating clients through income tax investigations, having represented many audit clients in the past. We know how to win in the audit, but we also understand what it means to “win” in the appeals division and beyond if we must litigate an issue.

On behalf of our clients, we aim to avoid prolonged conflicts with trusted tax audit representation. We seek to get our clients through their audits as quickly and painlessly as possible. When you find yourself in a position where you need that kind of expertise, however, you will be grateful that you hired an audit defense law firm like ours for IRS audit representation.

At the end of the day, our firm will fight to defend you and your right to compensation. We can offer a prompt assessment of your worries, a solid tax audit defense, and experienced advice on all audit-related difficulties.

Find the IRS Audit Representation You Need

The average taxpayer doesn’t have the knowledge of tax law needed to go up against the IRS. Therefore, IRS audit representation is essential to protect yourself. When you have a tax attorney handling your audit defense, you will not need to worry about communicating with the IRS or making a mistake that causes them to dig further into your finances. 

You don’t have to hide from tax problems anymore. Our experienced tax attorney will face the IRS on your behalf. Contact Damiens Law Firm, PLLC, at 601-488-2079 and learn more about our tax resolution services.