IRS Audit Help

Types of Tax Audits & How to Even the Odds with Professional Help

If your income tax return has been selected for an audit and you don’t know why, it could very possibly be that the IRS computer simply selected your tax return for audit. Or potentially your type of business is part of a compliance test program.

Whatever the reason, the IRS has contacted you for an audit and you are a bit concerned. 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. 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 tax audit is. Since the IRS can audit you by mail, in their offices, or in your office or home, the location is usually very telling.

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.

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 professional tax 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.

At Home Audits

When an IRS audit is scheduled at your home or office it should be considered a serious matter. The revenue agents handling these types of audits have received a great deal of training beyond the typical Tax Examiner. Naturally, during any type of audit, it can lead to audits of other tax years and other tax deductions. For that reason, it’s recommended to hire a tax resolution expert who can professionally asses your options, defend your position and get you all 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 defended.

Why Get Professional Help?

As an IRS licensed Enrolled Agent, I focus my tax practice on helping individuals and businesses resolve their tax problems. We bring a depth of financial and tax experience to the tax resolution arena along with a great deal of insight as to the most effective ways to handle an audit. We sensitively guide you through the procedure and explain exactly what you need to know and what to do.

More often than not, we can arrange it so that you will not have to meet with an auditor or revenue agent. So, don’t go in alone. It’s a scary feeling to face the IRS alone and we can help make the experience less frightening. Remember, every taxpayer has the fundamental right of due process, fairness and representation.

There is a time for everything... a time to weep and a time to laugh, a time to mourn and a time to dance. Ecclesiastes 3:1-4