Just because you're one of those selected for an IRS tax audit doesn't necessarily mean that you did something wrong on your last tax return. The Internal Revenue Service probably just got your name for audit via computer selection. Or the type of business that you run is part of some sort of compliance test procedure.
But regardless of the reason, the fact that the federal agency contacted you for IRS tax examination is a proper cause for concern. Before you panic, however, understand that in many cases, all the IRS really requires are probably missing documents which called for the audit in the first place.
There are different types of tax audits being conducted in various locations. This is an indication of how severe they can actually get. The location of the audit - i.e. your home, office or by mail - will say a lot about your status with the IRS.
This is the least severe of all IRS tax audit. In general the correspondence audit results from the discovery of missing documents from your tax return. These can include 1099 income items, W-2's or certain interest expense entries. The IRS Service Center will ask you for copies of canceled checks, receipts or any other paperwork in order to verify particular deductions that you have reported in your return. Correspondence audits are usually conducted for simple tax returns. Requests for documentation are typically handled through mail to prevent the hassle.
It's one thing to get IRS tax examination by mail and quite another to get audited in your home or your office. The revenue agents that are tasked with such kind of audits are usually trained in matters beyond the expertise of the ordinary Tax Examiner. It is not uncommon for a particular audit to lead the agent to review other tax years and deductions made on previous returns. As such, it would serve your best purposes to go and hire proper IRS tax representation to help you out. A tax resolution expert will be able to assess your options and defend your position with the IRS agent to ensure that your rights are upheld.
An IRS auditor's primary responsibility is to uphold compliance with federal tax laws. The problem is that many auditors lack sufficient time so it's only normal for them to fail to comprehensively review the appropriate documents for your IRS tax examinations. In fact, it's not uncommon to hear stories of auditors asking for certain documents without really explaining how and where they will be used. Because of this, there's a higher probability for error on the auditor's part which can also result in mistaken assessments and fraud penalties that are uncalled for. Having proper IRS tax representation will protect you from these hassles.
Why hire a professional
You need sufficient IRS tax representation when you have to undergo IRS tax audit at home. As a licensed Enrolled Agent, my priorities are focused on providing valuable assistance to individuals and businesses that need help in resolving their tax concerns. Together with my team, we come with sufficient experience in the financial and tax arena combined with helpful insight on the most effective ways through which our clients should handle IRS tax examinations. We will assist you through the intricate procedure of facing audits and explain each step to ensure that we're on the same page and you know exactly what needs to be done.
In many cases, we can arrange it so clients do not have to meet the auditor or revenue agent in person. You don't have to go through this alone. Every taxpayer has the right to due process and sufficient representation and we can help you out.