Receiving an audit notification is a stressful event for any taxpayer. There are so many variables in most tax returns that it may not be clear what triggered the audit and what you will need to review with the IRS. Before you communicate with the IRS about an audit, consult with a tax attorney about your options.
The Main Reasons for Seeking Legal Help with a Tax AuditOften a client will know the answer to this question at the very beginning. But, here are some of the typical reasons why someone would seek out legal support.
- If there are questionable items on the tax return
- There is no paperwork supporting the items on the return being audited
- If the client thinks that the tax return preparer was not honest or knowledgeable
How a Tax Attorney Can Provide Support DURING a Tax AuditThe Internal Revenue Service is not your friend, and they may try to entrap or trip up a taxpayer without representation. Often the client does not want to talk to the Internal Revenue Service at all, and that is fine. The tax attorney, sometimes working along with the accountant, will handle the audit and all correspondence with the Internal Revenue Service, and will control the flow of information. He will also do the necessary research to show the Internal Revenue Service cases and regulations that support the positions taken on the tax return.
How a Tax Attorney Can Provide Support AFTER a Tax AuditMany taxpayers find that they owe additional taxes based on the audit report and there are several options for moving forward.
- If a taxpayer owes a substantial amount of money, there may be some options for setting up a monthly payment plan with the IRS. A skilled tax attorney can help the taxpayer to negotiate that repayment program.
- If the taxpayer feels the need to challenge the audit report, he/she may appeal the audit results. An IRS attorney can help the taxpayer optimize their response to the IRS Appeals Office.
- Finally, if the findings of the IRS Appeals Office is not in the taxpayer’s favor, they may want to take the case to court. This step involves compiling and presenting evidence in a court of law. A tax attorney would be critical in this scenario.