We are a affordable local tax firm, experts for any type of IRS audits especially the tax preparer. Former IRS agents and managers.

If the IRS has decided to look at your business and conducting the due diligent audits contact former IRS agents who know the system.

We are A+ rated by the BBB and have been in practice since 1982. we know the system inside and out and all the methodologies used by Internal Revenue Service.

The IRS is making it a point and they are teamed with a myriad of IRS agents to close the loopholes that some tax preparers have been using the illegal filing of tax returns or abuse of particular tax credits.

Many of these preparers are actually doing the right thing but for various reasons IRS has flagged the person or their practice because of various reasons.

The Internal Revenue Service has a special team of agents going out that will handle these issues.

You must take this seriously because some preparers have been put in prison other stiff penalties while others IRS just simply said continue the work you’re doing.

If you are behind the eight ball and you think you are being pressed by Internal Revenue Service it only makes sense to hire former IRS agents who know the system and have been involved in these audits.

Let experience be your best friend.

IRS Auditing for Due Diligence Compliance

Audits for compliance with refundable credit and head of household (HOH) filing status due diligence requirements are another tier of our Preparer Compliance Program.

IRS looks returns with a high chance of errors completed by the same preparer and use that information to select preparers for audits.

IRS may have contacted the preparer using one of the other tiers of our Preparer Compliance Program but we don’t use all of them for every preparer.

Audit Visits

Before the filing season begins, IRS employees conduct due diligence audits based on the prior year returns. We schedule an appointment in advance for these pre-filing season audits and we expect preparers to schedule the audit within 15 days.

During the filing season, we conduct due diligence audits without advance notice. We previously sent the preparers a letter informing them of a potential audit. (see Reaching Out to Preparers for examples of the letters)

We may also audit the preparer’s client returns.

What Happens During the Audit?
During these audits, the IRS employee provides official IRS identification. The examiner interviews you about your business practices. If you are an employee of a tax preparation firm, the examiner also contacts your employer for an interview.

The examiner is looking for compliance with all four due diligence requirements.

The examiner reviews at least 25 returns reviewing the following documents:
• The preparer’s due diligence records,
• The probing questions the preparer asked the client, and the client’s responses,
• All questionnaires, checklists, worksheets and
• Copies of any client provided documents relied on to determine eligibility for head of household (HOH) filing status, or to determine eligibility for, or compute the amount of , the earned income tax credit (EITC), child tax credit (CTC), including additional child tax credit (ACTC) and credit for other dependents (ODC), and American opportunity tax credit (AOTC).

If the examiner identifies failures to meet due diligence on any of the returns, they may expand the audit to more returns.
During the audit, the examiner looks for evidence showing the preparer met the knowledge standard.

To meet the knowledge standard, a preparer must:

• Know the law
• Ask the right questions, especially when the client gives information that appears incorrect, inconsistent or incomplete
• Document the questions asked and the responses given by your client
• Get all the facts to make sure your client truly qualifies for EITC, CTC/ACTC/ODC, AOTC or HOH filing status

While auditing for due diligence, we also ensure that the preparer is in compliance with the PTIN, Preparer Tax Identification Number requirements and his or her personal tax return filing requirements.

What Happens if My Records Don’t Show I Met Due Diligence Requirements?

We assess penalties when we find a preparer did not comply with due diligence requirements. We continuously improve our audit selection process to find those preparers with a high likelihood of filing returns with errors.

Using this process, we penalized over ninety percent of the preparers we selected for audit.

We assess most penalties against preparers who did not meet the knowledge standard.
The penalty for not meeting due diligence requirements is $520* for each credit (EITC, CTC/ACTC/ODC and AOTC), or HOH filing status claimed on a return filed in 2019.

Other return-related preparer penalties can be as much as $5,000.

* The penalty amount is adjusted for cost of living under IRC Section 6695(h).
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