How to Address an IRS Tax Audit

Tax Audit | IRS tax Audit | IRS Audit Process Timeline | Albany NY


It helps to take certain steps to learn how to Address an IRS Tax Audit. A tax audit by the Internal Revenue Service is an examination of an organization or individual’s finances, and is done to ensure that information is being reported in accordance of tax laws and they are taxed correctly.

If you or your organization has been selected for an audit by the IRS, this does not always mean that there is an error or taxes owed. Returns are selected based on three methods:

  • Random Selection: Returns can be selected randomly on a computer and are based on a mathematical formula.
  • Document Matching: When records provided by an employer, such as Form W-2 or Form 1099-Misc, do not match the information reported by a taxpayer.
  • Related Examinations: Returns may be selected for an audit when they are related to a business partner or business investor who was selected for an audit.

IRS records can be conducted through the mail or an interview. Interviews can happen at an IRS office, the taxpayer’s home, taxpayer’s business, or taxpayer’s accountant’s office. The IRS will tell you which records are needed. It is required by law for taxpayers to keep the records used to prepare your return, usually for three years from the date the tax return was filed. It is a better idea to keep these records for longer than three years so you are able to refer back to them at any time since often I have found this to be very helpful. Tax audits can result in no changes or changes, and any proposed changes will be explained.

If you are audited, you still have rights, and these rights are maintained throughout the examination, appeal, collection and refund process. You have the right to:

  • Privacy and Confidentiality of your information.
  • To know why the IRS is asking for information, how the IRS will use the information and what will happen if the information requested is not provided.
  • To represent yourself or seek representation of a tax attorney.
  • Appeal disagreements.

Audits vary in length of time due to the complexities and information available for each individual case. Audits will end in either no change, agreed, or disagreed. With no change, the IRS reviews the items that were being audited and results in no change. For agreed, the IRS proposes changes and the taxpayer understands the changes and agrees with them. If you agree with the findings of the audit, you will be asked to sign the examination report and pay if any tax liability is owed. For disagreed, the IRS proposes changes and the taxpayer understands the changes, but disagrees with them. If you disagree with the findings you have the right to appeal.

If you receive a notice for an audit, you should not ignore it. in summary, how to Address an IRS Tax Audit? If you do not reply within 30 days, the IRS can take action. The notice you receive will have all the information you need to know on it. This will include what is being reviewed, and the documents that you need to provide. You should organize your records and if anything is missing, get duplicates so your records are complete and accurate. If you receive a notice of Audit from the IRS, contact an experience IRS Tax Attorney who can help you through the process and obtain the best outcome.

IRS Audit Defense Tactics

IRS Audit Defense Tactics are an important step in successfully resolving your tax issue. When the Internal Revenue Service or IRS issues its intention to audit your financial capabilities, it can be a very difficult situation. A tax audit is any form of communication, whether through letters or telephone calls, which tells you that the IRS intends to investigate all the items in your income tax forms.

In most cases, an IRS audit strikes fear in taxpayers because of the uncertainty and stress it will cause. Thankfully you can apply for sufficient protection with an IRS audit defense.

Your Quick Response to an IRS Audit

Although an IRS audit may seem intimidating, it should be done at a time and place that is convenient to you. This allows you ample room to prepare for the auditing process. It is important to note that there are three types of audits:

  • Office audit
  • Correspondence audit
  • Home audit

Before you allow the audit, you should carefully study your tax records and tax returns in question and your IRS Audit Defense Tactics. You should find out if there is a basis for the audit. Moreover, study your rights and protection when it comes to an IRS audit.

During an actual audit, you can request the investigator to strike out irrelevant issues pertaining to your possible tax liabilities.

Steps to Start Your IRS Audit Defense

You do not have to feel helpless when confounded with an IRS audit. There are many resources at your disposal to help you cope up effortlessly with this situation.

It is a huge plus if you can get the services of a tax professional such as a tax attorney who has experience with tax audits. It may prove to be a better investment compared to the amount of money you may lose with an increased assessment of tax liabilities and resulting need for a federal tax lien discharge.

With the help of a tax professional, you don’t have to endure direct communication with the IRS. All forms of communication about your audit will be handled on your behalf.

IRS Audit Myths

With the immediate perception that an IRS audit is intimidating, taxpayers are typically struck with fear and a feeling of being powerless when confronted with an actual IRS audit. If it only involves one spouse, the innocent spouse claim may be the best option. But there are typical myths when it comes to IRS audit myths that can help you:

  • It is not true that taxpayers are powerless and should pointlessly follow every declaration and order of the IRS. You have the right to ask questions and to assert your rights.
  • It is not true that you cannot claim a deduction without a receipt. In fact, you can respectfully challenge the decisions and findings of an IRS auditor.
  • It is not true that you are compelled to provide the IRS auditor everything they want to know about your personal finances. As a rule of thumb, always ask the auditor the purpose of every probing question they ask.

Right to Appeal the Results of an IRS Audit

The results of an IRS audit are not set in stone. If it appears unfair to you, you can exercise your Right of Appeal.

An IRS tax audit can be very problematic for people with tax deficiencies. However, tax problems always have a solution. A successful IRS tax audit defense will help strengthen your financial situation towards stability in the future.

Back tax Audit Defenses

A client who has unpaid IRS or State taxes and is needing IRS Tax Defenses for back taxes to the IRS or State collection process of his or her outstanding income tax liability. Therefore, IRS Tax Defenses- Back Taxes needs to be explored. In determining which defenses are available for their tax case,  the taxpayer and adviser will analyze many options to determine the best course of action.

  • Determine whether the income tax was properly assessed to make sure you need back taxes help. While the IRS does not ordinarily does not assess an incorrect tax by not processing a tax return correctly, the IRS frequently will determine the tax owed of a taxpayer who has not filed an income tax return. In these cases, the IRS often computes an incorrect tax since they were not aware of any of the particulars of the taxpayer, such as the number of child they have, whether they are married, or if they had business expenses (which would offset business income).
  • Make sure that the statute of limitations (SOL) on collection of the tax debt has not expired. Normally the IRS has 10 years from when they assessed the tax to collect it. This period of time can be increased if you file an offer in compromise, or pending payment plan. Therefore, it makes sense to double check the IRS on the dates your tax debt expires since they sometimes miscalculate the date.
  • Determine whether a claim as an innocent spouse is available. If you were married, and are not now, and the other person did not include all their income on the tax return, you are a prime candidate for this relief of back taxes help.
  • Go the Taxpayer Advocate is the collection action is causing a hardship. This is hard to accomplish, but worth trying to slow the IRS down.
  • Request a audit reconsideration as a IRS Tax Defenses- Back Taxes, is available when you did not know or knowingly did not participate in the audit. This happens a lot. A IRS audit can be very overwhelming and sometimes people freeze and do not participate in their own audit. This leads to a situation where the IRS overstates your income, or does not allow of your deductions to count since they did not see the receipts. The technical term for this is called an audit reconsideration.
  • File an offer in compromise to settle the tax debt. This should only be done if you have the resources to offer a legitimate amount to settle the tax debt. In very rare cases the IRS settles for pennies on the dollar, so be aware of TV and radio ad scams. That said, this can be a very useful solution and it should be analyzed fully if it’s the best solution.
  • Contact the tax department and negotiate an installment payment agreement. This option offers many possibilities, since the IRS often enters into payment plan where the total debt will never be paid off. They call this type of payment plan a part pay installment agreement., and
  • As a final option, file a petition in the bankruptcy Court to obtain back taxes help.

Tax Audit | IRS tax Audit | IRS Audit Process Timeline | Albany NY

These “defenses” may not stop the IRS cold, but it will slow them down to make the situation much more manageable.


Tax Audit | IRS Tax Audit | IRS Audit Process Timeline

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