Nothing strikes fear in the hearts of people more than receiving an IRS Audit letter in the mail. Audits take significant time away from your business and family, requiring you to gather mounds of records substantiating each and every item reported on your tax return and develop a comprehensive understanding of tax law.
The IRS is auditing your tax return because they believe there is an issue with your tax return. Review the different types of tax audits to help you determine whether you need IRS audit representation.
1) By Mail IRS Tax Audits: Generally you will not need IRS audit representation for this type of audit. The IRS will ask you to provide proof for one or two things on your tax return. If you have clear proof, then you do not need IRS representation. However if the issues are more complicated and/or you lack proof, then we recommend that you hire a professional.
2) Random IRS Tax Audits: You may or may not need IRS audit representation for this type of audit. The IRS did not select your tax return because of possible issues. The IRS randomly selected it. This type of IRS tax audit is comprehensive and the IRS will review everything on the tax return. A random IRS audit can be time-consuming depending on the complexity of your tax return. If you have documents to support everything reported on the tax return, then you do not need IRS audit representation. Consider hiring IRS audit representation if you are aware of issues on your return.
3) In-Office IRS Tax Audits: You should consider hiring IRS audit representation for this type of audit. Your tax return was selected because the IRS believes there is an issue with the tax return and they decided the issue was big enough to assign your case to a IRS Revenue Agent. The Revenue Agent will focus on the problem areas.
4) Field IRS Tax Audits: We highly recommend that you get proper IRS audit representation for this type of audit. Your tax return was selected because the IRS believes there are MAJOR issues with your tax return and they have assigned your case to an experienced IRS Revenue Agent. The goal is to uncover all issues with your tax return. The IRS will expect to conduct the audit at your home and/or place of business. The IRS will review your business and home surroundings to determine if you reported all your income. The IRS will look at the business equipment, the cars you drive, home furnishings, kitchen appliances, TVs, and other items of value.
The IRS leaves no stone unturned in its mission to determine the accuracy of your tax return. If you don't comply with the Auditors' wishes, the IRS will recalculate your tax and send you home with a hefty tax bill as your parting gift.
Many taxpayers decide to handle a tax audit themselves, and discover they may have been "penny wise," avoiding a representative's fee, but "pound foolish," because they received a substantial bill for a significant tax deficiency.
You see, IRS Auditors are trained to extract more information from you than you have a legal obligation to provide. IRS Auditors know that most people fear them and are ignorant of their rights. As a result, they know they can use that fear and ignorance to their advantage.
Rarely do our clients even have to talk with the IRS. We handle it all for you so that you need not take time off of your business or job to handle the bureaucracy and paperwork of the IRS. No lost wages or business. You simply forward notification of an audit to us and we handle it from A to Z.