About Audit Defense
An IRS or state audit can be stressful, time-consuming, and expensive.
When the IRS or state starts an audit, it expects the taxpayer to respond quickly. The audit procedures and protocols can be confusing and intimidating. The auditor may be difficult to work with and he or she may make unreasonable demands for information. The auditor may also propose unreasonable tax adjustments and do little to explain the rules or the taxpayer’s rights.
Then there is the cost of hiring someone to help. Tax attorneys can be expensive. Tax return preparers are often hired as they are perceived to be less expensive. While most tax preparers know about taxes, most have little experience with IRS or state audits. Other taxpayers try to handle audits themselves. This almost always results in the taxpayer paying more in taxes than necessary.
We offer audit defense as a way to help clients secure experienced representation at an affordable rate. IRS audits are one of our main focus areas. We have direct experience working for the IRS and have handled hundreds of IRS and state audits.
What is Audit Defense?
Audit defense refers to representing a client before the IRS or state auditors. It includes the following:
- Serving as the point of contact for the auditors. Once we are hired, our clients typically do not ever have to meet with the auditor.
- Identifying a strategy for defending the tax positions reported on tax returns.
- Looking for additional tax benefits that were not reported on the tax returns that may still be available.
- Helping to identify, assemble, and submit information to the auditor.
- Reviewing any computation adjustments and closing paperwork to make sure it is complete and accurate.
Audit defense helps ensure that:
- The auditor’s information requests are focused. This can go a long way in minimizing the burden associated with gathering information for the audit. It can also limit the client’s tax exposure by not raising unnecessary issues.
- The auditor follows the proper procedures. There are specific laws, regulations, administrative guidance, and policies that dictate what auditors can and cannot do. Unfortunately, it is common for auditors to violate these rules. Auditors are often able to get away with this as taxpayers are not even aware of the rules.
- The audit results in no change or the smallest tax adjustments legally possible.
Steps Involved in Audit Defense
Audit defense includes the following steps:
- We review your notice/letter with you and tell you exactly what it means and what needs to be done.
- You sign a tax Power of Attorney form allowing us to take over communication/correspondence with the auditor and to represent you.
- We will ask you for documents and information supporting the items on your tax return(s) under examination, where appropriate.
- We will lay out a step-by-step strategy for resolving your audit and an expected timeframe for doing so.
- We will respond to and work with the auditor on your behalf.
- We will keep you apprised of what’s going on every step of the way.
- We will advocate your tax positions in an effort to get a timely and appropriate resolution whereby you pay the least amount allowed by law.
- We are local to this geographic area. You can come by our office and meet us to go over the documents. You do not have to mail your sensitive documents to some remote location. We know the auditors in this area and have a great working relationship with them.
- We are former IRS employees. There is no substitute for the experience one gains while working for the government.
- We know tax. We employ attorneys and accountants who have professional licenses and degrees. In fact, most of our employees have advanced degrees that focus on taxes and law.
- We have a strong client focus. We are not a large corporation that views clients as mere numbers. We take the time to get to know our clients, their work and businesses, and their goals and circumstances. This not only helps us better serve our clients, it helps us be better advocates for our clients.