by Fresh Start Tax | Jun 4, 2013 | IRS Tax Audit
IRS & State Tax Audit Defense
You can hire Former Local IRS agents and managers who worked out of the local South Florida IRS offices for a combined 60 years.
We have worked as agents, managers, teaching instructors, appellate agents and have even taught tax law at the Internal Revenue Service.
If you are undergoing a tax audit in Miami or South Florida it only makes sense to hire former government employees who know all the solutions, all the remedies, and all the different tax defenses to use for undergoing an IRS or state tax audit.
Also on staff are tax attorneys, tax lawyers, certified public accountants, and former appeals agents with the Internal Revenue Service.
We have been in private practice right here in South Florida since 1982 and we are A+ rated by the Better Business Bureau.
Come by and visit us for a free initial tax consultation
IRS audits 1.1% of all personal income tax returns.
If you won the IRS audit lottery you should never go into IRS unrepresented for an IRS audit. As a former IRS agent seeking good professional tax will in the long run save you aggravation, grief, stress and keep money in your pocket in the long run.
If you have received an IRS letter or notice that you are going to undergo an IRS tax audit is in your best interest to call former IRS agents and managers who know all of the protocols, techniques and tax defenses to best defend your tax return that is undergoing an IRS tax audit.
Some of the Reasons why IRS selected your tax return for an IRS audit
1. High income.
If your income is $200,000.00 and over; the audit rate will be one-in-twenty seven of being audited. If your income is $1,000,000.00 or more, the audit rate will be one-in-eight of being audited. This is just a fact of life.
2. Failing to report all of your taxable income.
The IRS receives copies of all 1099’s, W-2’s, W-2G’s and K-1’s that you receive. If the income from the 1099’s, W-2’s, W2G’s and K-1’s are not shown on the tax return, the tax return will be audited.
3. Deducting the home office deduction.
The space used in your home must be used “exclusively and regularly” as your principal place of business. “Exclusive use” means that a specific area of the home is used only for trade or business. If you can prove the home office deduction, then take it. If you can’t prove it, don’t take it.
4. Deducting large charitable contributions.
If your charitable deductions are large compared with your income, the return will be audited. The IRS is aware of what the average charitable donation is for a given income level. If you have donated and deducted a conservation easement to a charity, chances are good that you will be audited.
5. Deducting rental losses.
Normally, the passive loss rules prevent rental losses from being deducted. There are two exceptions, if you actively participate in the renting of your property, you can deduct up to $25,000.00 of the loss against your other income; but this $25,000.00 limitation phases out as adjusted gross income exceeds $100,000.00.
The second exception applies to real estate professionals who spend more that 50% of their working hours and 750 or more hours each year materially participating in reals as a developer, broker, landlord or the like. The IRS will be requesting that you prove the required hours, especially if are a full time employee.
6. Deducting business meals, travel and entertainment.
The IRS has specific record keeping requirements for these type of deductions. The IRS is aware that many taxpayers overstate these type of deductions.
7. Deducting losses from a hobby activity.
If you treat your favorite hobby as a business on your tax return with a net loss, you have a good chance of being audited. If you are audited, you will need to prove that your activity is a profit making activity and not a costly hobby.
So make sure that you run your activity in a businesslike manner and can substantiate your expenses with supporting documents.
8. Running a cash business.
If you are in a cash-intensive business, like taxis, car washes, bars , hair salons, restaurants, you will be audited. The IRS is aware that individuals who primarily receive cash, don’t report all of their taxable income. The IRS has various audit techniques to determine unreported cash income.
9. Failing to report a foreign bank account.
If you fail to report a foreign bank, you will be assessed large penalties. If you have any signature authority over a foreign bank account, you will need to consult with a tax professional to determine the correct reporting requirements for that account.
10. Engaging in currency transactions.
If you are engaged in cash transactions in excess of $10,000.00, the IRS will receive reports of these transactions from the financial institutions. Further, if you engage in suspicious cash activities, the IRS will receive a “suspicious-activity report” from the various financial institutions.
These transactions usually indicate that the the taxpayer is trying to hide income from the IRS. Try to avoid these type of transactions.
Miami – Tax Audit – IRS & State Tax Audit Defense – Affordable Former IRS Agents, Managers, Attorneys
by Fresh Start Tax | Jun 4, 2013 | IRS Tax Audit
Former IRS Agents, Managers for IRS Tax Audit
We are a local South Florida tax firm that specializes in IRS tax audits and IRS tax settlements.
It only makes sense if you are undergoing an IRS tax audit to hire former IRS agents and managers who have over 60 years of working directly in the local South Florida IRS offices.
As a result of all our years of experience in the local South Florida Internal Revenue Service, we know all the IRS audit techniques, IRS audit protocols, and all the IRS tax audit settlement formulas.
As former IRS agents and managers we taught new IRS agents their job therefore we know every single technique that will be used by the Internal Revenue Service.
Beside working as IRS auditors and revenue agents some on our staff have also worked in the IRS appeals offices.
We also are staffed with tax attorneys, tax lawyers and certified public accountants for more complicated matters.
We are one of the most experienced tax firms in South Florida handling the IRS tax audit.
We have been in private practice since 1982 right here in South Florida and have a A+ rating by the Better Business Bureau.
We are available for a free initial tax consultation and will conduct a free analysis of any tax audit you may be going through.
The hiring of any professional tax firm should surely ease the consequence of any tax issues that may arise as a result of the Internal Revenue Service auditing any income, business or corporate tax return.
IRS Use Audit Techniques Guides for Business Tax audits.
If you are going to experience in IRS business tax audit there are certain audit techniques that the IRS will follow. Most professional tax firms understand these audit technique guides. You can find these on a technique guides on our website or contact us directly to learn more.
These Audit Techniques Guides (ATGs) help IRS examiners during audits by providing insight into issues and accounting methods unique to specific industries.
While ATGs are designed to provide guidance for IRS employees, they’re also useful to small business owners and tax professionals who prepare returns.
ATGs explain industry-specific examination techniques and include common, as well as, unique industry issues, business practices and terminology.
Tax Guidance is also provided on the examination of income, interview techniques and evaluation of evidence. So they may be helpful for business and tax planning purposes. By following the same format that IRS uses for an IRS tax examination you can move forward worry free knowing you are following the exact rules and protocol set up by the Internal Revenue Service.
Commonly asked Questions for the IRS Tax Audits, both Individual and Business
Why was my individual or business tax return selected for audit?
When returns are filed, they are compared against “norms” for similar returns. The “norms” are developed from audits of a statistically valid random sample of returns. These returns are selected as part of the National Research Program which the IRS conducts to update return selection information.
The individual or business tax return is next reviewed by an experienced auditor.
At this point, the return may be accepted as filed, or if based on the auditor’s experience questionable items are noted, the agent will identify the items noted and the return is forwarded for assignment to an examining group.
Upon assignment to a local tax group, the return is reviewed by the manager. The manager has the right to survey the case which means it has the right to tell the service center this is not a worthy tax return for an IRS tax audit.
Items considered in assigning a case are: factors particular to the area such as issues pertaining to construction, farming, timber industry, etc. that have specific factors and rules that apply.
Based on the review, the manager can accept the return or assign the return to an auditor.
The assigned auditor again reviews the return for questionable items and either accepts it as filed or contacts the taxpayer to schedule an appointment.
Where will the income or business IRS Tax audit be held?
It depends on the type of audit being conducted.
Audits by Mail/Correspondence Audit.
Some audits are conducted entirely by mail. If the audit is conducted by mail, you will receive a letter from the IRS asking for additional information about certain items shown on the tax return such as income, expenses, and itemized deductions.
In-Person Audits are audits conducted either at a local IRS office or at your business location.
Can you request the tax audit be conducted at the IRS office instead of at your place of business?
If the income or business tax audit has been scheduled to be conducted at your location, it will generally be conducted where the books and records are located.
Requests to transfer the audit to another location, including an IRS office, will be considered but may not be granted. Treasury Regulation 301.7605-1(e), Time and place of audit, discusses the items considered when a request for a change in location is made. being a former IRS agent and instructor is always best to hold the IRS tax audit at the location of your tax professional who is handling your IRS tax audit.
I never recommend the IRS going to your home or place of business. You should follow the advice of the tax professional you hire to handle your IRS income or business tax audit.
Can the audit be transferred to another IRS office?
You can request a transfer of an audit if you have moved. Several factors will be considered such as your current location, the location of the business and where the books and records are maintained.
If the audit is by correspondence, you can request a face-to-face audit because the books and records may be too voluminous to mail.
IRS has the right to refuse to transfer the tax audit if it feels that the taxpayer or the tax professional is trying to stall the tax audit.
How long should the records related to a business or other long-term asset be kept?
In the case of an asset, records related to the asset should generally be kept for as long as you have the asset plus three years.
If the asset was exchanged, the basis for the new asset may include the exchanged asset so the records for both assets will need to be retained until the new asset is disposed plus three years from the file date of the tax return for the year of disposition.
How long should payroll tax records be kept?
Generally, payroll tax records should be kept for six years with a review of the file to see if any items relating to current employees should be retained with current records.
How far Back can the IRS go Back on a IRS Tax Audit
As a general rule, the IRS can include returns filed within the last three years in an audit. Additional years can be added if a substantial error is identified.
Generally, if a substantial error is identified, the IRS will not go back more than the last six years.
The IRS tries to audit tax returns as soon as possible after they are filed. Accordingly most audits will be of returns filed within the last two years. IRS is making every effort to audit returns much quicker. The IRS is attempting to put IRS audit triggers in place to capture tax cheats in real time.
Statute of Limitations on IRS Income and business tax audits
If an audit is for an older year, you may be requested to extend the statute of limitations for assessment of your tax return.
The statute of limitations limits the time allowed to assess additional tax.
The statute of limitations is generally three years after a return is due or was filed, whichever is later. There is also a statute of limitations for making refunds.
If the audit is not resolved and the statute of limitations date is nearing, you may be asked to extend the statute of limitations date.
This will allow you additional time to provide further documentation to support your position, request an appeal if you do not agree with the audit results, or to claim a tax refund or credit. It also allows the IRS time to complete the audit and provides time to process the audit results.
You do not have to agree to extend the statute of limitations date. However, if you do not agree, the examiner will be forced to make a determination based upon the information they currently have.
Therefore, the examiner may not be able to consider additional adjustments, such as expenses, that could lower the amount of tax due.
IRS Facts for Tax Audits of Income and Business Audits
The IRS audits about 1 percent of the individual tax returns.
143.4 million – Individual federal tax returns filed in 2011.
1.4 million – Individual tax returns examined by the IRS, resulting in notices being mailed or in-person audits.
90 percent – Tax returns audited in person resulting in a recommended change in taxes.
85 percent – Tax returns audited via mail resulting in a recommended change.
$15.1 billion – Amount of recommended additional taxes from the audits.
$16,851 – Average recommended additional taxes per in-person audit.
$8,241 – Average recommended additional taxes per mail audit.
This Source material is from the 2012 Internal Revenue Service Data Book. The public has a right to look at any information regarding IRS statistics. Simply go online to IRS.gov and you will find a wealth of information.
Contact us today for free initial consultation if you are going a IRS income or business tax audit.
You can speak directly to former IRS agents and instructors who know the exact systems and protocols of an IRS tax audit.
We are the affordable tax firm.
Former IRS Agents, Managers for IRS Individual, Business Tax Audits – Ft.Lauderdale, Miami, Palm Beaches, Boca – South Florida
by Fresh Start Tax | Jun 4, 2013 | IRS Tax Audit
IRS Audit – Tax Audit – Affordable Attorneys, Lawyers, CPA’s, Former IRS
We are a local South Florida tax firm that specializes in IRS tax audits.
We have over 60 years of direct working experience and knowledge of the local South Florida Internal Revenue Service.
As a result of all our years of experience at the Internal Revenue Service we know all the IRS audit techniques, IRS audit protocols, and all the IRS tax audit settlement formulas.
Beside working as IRS auditors, and revenue agents some on our staff have also worked in the IRS appeals offices.
We are one of the most experienced tax firms in South Florida handling the IRS tax audit
We have been in private practice since 1982 right here in South Florida and have a A+ rating by the Better Business Bureau.
We are available for a free initial tax consultation and will conduct a free analysis of any tax audit you may be going through.
Do not be worried or stress as a result of an IRS tax audit.
The hiring of any professional tax firm should surely ease the consequence of any tax issues that may arise as a result of the Internal Revenue Service auditing any income, business or corporate tax return.
Some Commonly asked Questions for the IRS Tax Audit
Why was my return selected for audit?
When returns are filed, they are compared against “norms” for similar returns. The “norms” are developed from audits of a statistically valid random sample of returns. These returns are selected as part of the National Research Program which the IRS conducts to update return selection information.
The return is next reviewed by an experienced auditor.
At this point, the return may be accepted as filed, or if based on the auditor’s experience questionable items are noted, the agent will identify the items noted and the return is forwarded for assignment to an examining group.
Upon assignment to a group, the return is reviewed by the manager.
Items considered in assigning a case are: factors particular to the area such as issues pertaining to construction, farming, timber industry, etc. that have specific factors and rules that apply. Based on the review, the manager can accept the return or assign the return to an auditor.
The assigned auditor again reviews the return for questionable items and either accepts it as filed or contacts the taxpayer to schedule an appointment.
Where will the IRS Tax audit be held?
It depends on the type of audit being conducted.
- Audits by Mail/Correspondence Audit: Some audits are conducted entirely by mail. If the audit is conducted by mail, you will receive a letter from the IRS asking for additional information about certain items shown on the tax return such as income, expenses, and itemized deductions.
- In-Person Audits are audits conducted either at a local IRS office or at your business location.
Can you request the audit be conducted at the IRS office instead of at your place of business?
If the audit has been scheduled to be conducted at your location, it will generally be conducted where the books and records are located.
Requests to transfer the audit to another location, including an IRS office, will be considered but may not be granted. Treasury Regulation 301.7605-1(e), Time and place of audit, discusses the items considered when a request for a change in location is made. being a former IRS agent and instructor is always best to hold the IRS tax audit at the location of your tax professional who is handling your IRS tax audit. I never recommend the IRS going to your home or place of business.
Can the audit be transferred to another IRS office?
You can request a transfer of an audit if you have moved. Several factors will be considered such as your current location, the location of the business and where the books and records are maintained.
If the audit is by correspondence, you can request a face-to-face audit because the books and records may be too voluminous to mail.
IRS has the right to refuse to transfer the tax audit if it feels that the taxpayer or the tax professional is trying to stall the tax audit.
How long should the records related to a business or other long-term asset be kept?
In the case of an asset, records related to the asset should generally be kept for as long as you have the asset plus three years. If the asset was exchanged, the basis for the new asset may include the exchanged asset so the records for both assets will need to be retained until the new asset is disposed plus three years from the file date of the tax return for the year of disposition.
How long should payroll records be kept?
In general, payroll records should be kept for six years with a review of the file to see if any items relating to current employees should be retained with current records.
After an auditor completes the audit, will the case be reviewed to ensure the audit results are correct?
All cases may be reviewed by the auditor’s manager either during the audit or upon completion. If errors are noted by the manager, the auditor will contact you to advise you about the proposed correction and what impact this may have on the amount of tax due.
How far Back can the IRS go Back on a IRS Tax Audit
As a general rule, the IRS can include returns filed within the last three years in an audit. Additional years can be added if a substantial error is identified.
Generally, if a substantial error is identified, the IRS will not go back more than the last six years.
The IRS tries to audit tax returns as soon as possible after they are filed. Accordingly most audits will be of returns filed within the last two years.
Statute of Limitations
If an audit is for an older year, you may be requested to extend the statute of limitations for assessment of your tax return. The statute of limitations limits the time allowed to assess additional tax.
The statute of limitations is generally three years after a return is due or was filed, whichever is later. There is also a statute of limitations for making refunds.
If the audit is not resolved and the statute of limitations date is nearing, you may be asked to extend the statute of limitations date. This will allow you additional time to provide further documentation to support your position, request an appeal if you do not agree with the audit results, or to claim a tax refund or credit. It also allows the IRS time to complete the audit and provides time to process the audit results.
You do not have to agree to extend the statute of limitations date. However, if you do not agree, the examiner will be forced to make a determination based upon the information they currently have.
Therefore, the examiner may not be able to consider additional adjustments, such as expenses, that could lower the amount of tax due.
IRS Facts for Tax Audits
The IRS audits about 1 percent of the individual tax returns.
- 143.4 million: Individual federal tax returns filed in 2011.
- 1.4 million: Individual tax returns examined by the IRS, resulting in notices being mailed or in-person audits.
- 90 percent: Tax returns audited in person resulting in a recommended change in taxes.
- 85 percent: Tax returns audited via mail resulting in a recommended change.
- $15.1 billion: Amount of recommended additional taxes from the audits.
- $16,851: Average recommended additional taxes per in-person audit.
- $8,241: Average recommended additional taxes per mail audit.
This Source material is from the 2012 Internal Revenue Service Data Book.
IRS Audit – Tax Audit – Affordable Attorneys, Lawyers, CPA’s, Former IRS – Tax Audit Experts – Miami, Ft.Lauderdale, West Palm Beach, Boca
by Fresh Start Tax | Jun 4, 2013 | IRS Tax Audit
Tax Audits IRS – Your Chances – Former IRS Audit Tax Help
We are former IRS agents and managers who worked out of the local South Florida offices for over 60 years.
We worked as IRS auditors, revenue agents, revenue officers, and former IRS appellate agents
While at Internal Revenue Service we taught tax law.
We have represented thousands of people before the Internal Revenue Service.
We have been in practice in South Florida since 1982 and are A+ rated by the Better Business Bureau.
If you are going through a tax audit from the Internal Revenue Service and have any questions, please feel free to call us today for an initial tax consultation and speak directly to former IRS agents and managers.
We are the Affordable Tax firm.
The Internal Revenue Service audits thousands of Americans every year throughout the United States.
Here are your percentages of an IRS tax audit.
IRS Facts for Tax Audits
The IRS audits about 1 percent of the individual tax returns.
- 143.4 million: Individual federal tax returns filed in 2011.
- 1.4 million: Individual tax returns examined by the IRS, resulting in notices being mailed or in-person audits.
- 90 percent: Tax returns audited in person resulting in a recommended change in taxes.
- 85 percent: Tax returns audited via mail resulting in a recommended change.
- $15.1 billion: Amount of recommended additional taxes from the audits.
- $16,851: Average recommended additional taxes per in-person audit.
- $8,241: Average recommended additional taxes per mail audit.
This Source material is from the 2012 Internal Revenue Service Data Book.
Tax Audits IRS – Your Chances – Former IRS Tax Audit Tax Help – Miami, Ft.Lauderdale, Palm Beaches, Boca – FLORIDA
by Fresh Start Tax | Jun 3, 2013 | IRS Tax Audit
Federal Tax Audits, IRS Supervisors- Former IRS
If you are going to undergo a federal tax audit contact us today for a free initial tax consultation and find out how we can make this a worry free federal tax audit.
We are comprised of tax attorneys, IRS tax lawyers, certified public accountants, and former IRS agents, managers and tax instructors who have logged over 60 years of direct federal tax audit experience at the Internal Revenue Service.
We have been in private practice since 1982 and we are A+ rated by the Better Business Bureau.
We are experts in IRS federal tax representation. We taught tax law at the Internal Revenue Service.
Being former IRS agents and managers we know all the protocols, all the systems and all the IRS settlement procedures.
If you are going to retain any tax professional you want to make sure you hire the most experienced, affordable and by all means former IRS agents who know exactly how to get your very best result.
Why does IRS conduct a Federal Tax Audit
The IRS examines (audits) tax returns to verify that the tax reported is correct. The Internal Revenue Service audits of millions of taxpayers every year. IRS conducts 1.4 million audits alone and W-2, 1099 mismatching.
Selecting a federal tax return for a tax examination does not always suggest that the taxpayer has either made an error or been dishonest.
In fact, some federal tax audit examinations result in a refund to the taxpayer or acceptance of the return without change.
The overwhelming majority of taxpayers files returns and make payments timely and accurately. Taxpayers have a right to expect fair and efficient tax administration from the IRS, including verification that taxes are correctly reported and paid with enforcement actions against those who fail to comply voluntarily.
Do not be bullied, you have Taxpayer Rights
The IRS trains its employees to explain and protect taxpayers’ rights throughout their contacts with taxpayers. however this is not always the case. You need to be aware of your taxpayer Bill of Rights. With IRS targeting certain people, industries and nonprofit organizations these Bill of Rights people can become critical during an IRS tax audit.
These rights include:
- A right to professional and courteous treatment by IRS employees.
- A right to privacy and confidentiality about tax matters.
- A right to know why the IRS is asking for information, how the IRS will use it and what will happen if the requested information is not provided.
- A right to representation, by oneself or an authorized representative.
- A right to appeal disagreements, both within the IRS and before the courts.
How Federal Tax Income Tax Returns Are Selected for Examination
The IRS selects tax returns using a variety of methods, including:
- Potential participants in abusive tax avoidance transactions — Some returns are selected based on information obtained by the IRS through efforts to identify promoters and participants of abusive tax avoidance transactions. Examples include information received from “John Doe” summonses issued to credit card companies and businesses and participant lists from promoters ordered by the courts to be turned over to the IRS.
- Computer Scoring — Some returns are selected for examination on the basis of computer scoring. Computer programs give each return numeric “scores”. The Discriminant Function System (DIF) score rates the potential for change, based on past IRS experience with similar returns. The Unreported Income DIF (UIDIF) score rates the return for the potential of unreported income. IRS personnel screen the highest-scoring returns, selecting some for audit and identifying the items on these returns that are most likely to need review. the computer scoring audit is the most common tax audit that will be conducted by the Internal Revenue Service. Fresh Start Tax has on staff a former IRS agent who actually was part of the computer scoring process.
- Large Corporations — The IRS examines many large corporate returns annually.For tax returns over $10m , you have a 28% chance of a IRS tax audit.
- Information Matching — Some returns are examined because payer reports, such as Forms W-2 from employers or Form 1099 interest statements from banks, do not match the income reported on the tax return. IRS conducted 1.4 million information matching audits last year alone.
- Related Examinations — Returns may be selected for audit when they involve issues or transactions with other taxpayers, such as business partners or investors, whose returns were selected for examination. These related examinations are usually a result of corporate or partnership tax audits that carryover to individuals individual tax returns.
- Other — Area offices may identify returns for examination in connection with local compliance projects. These projects require higher level management approval and deal with areas such as local compliance initiatives, return preparers or specific market segments. You can find a list of the specific market segment tax audits on our website.
Federal Tax Audit Examination Methods
An examination may be conducted by mail or through an in-person interview and review of the taxpayer’s records. The interview may be at an IRS office (office audit) or at the taxpayer’s home, place of business, or accountant’s office (field audit).
Taxpayers may make audio recordings of interviews, provided they give the IRS advance notice.
If the time, place, or method that the IRS schedules is not convenient, the taxpayer may request a change, including a change to another IRS office if the taxpayer has moved or business records are there. It is always best to have the federal tax audit conducted at the location of your tax professional. You should never have a IRS federal tax on it in your home, office, or place of business.
The audit notification letter tells which records will be needed. Taxpayers may act on their own behalf or have someone represent or accompany them. If the taxpayer is not present, the representative must have proper written authorization.
The auditor will explain the reason for any proposed changes. Most taxpayers agree to the changes and the audits end at that level.
Your Federal Tax Audit Appeal Rights
Appeal Rights are explained by the examiner at the beginning of each audit. Taxpayers who do not agree with the proposed changes may appeal by having a supervisory conference with the examiner’s manager or appeal their case administratively within the IRS, to the U.S. Tax Court, U.S. Claims Court or the local U.S. District Court.
If there is no agreement at the closing conference with the examiner or the examiner’s manager, the taxpayer has 30 days to consider the proposed adjustments and their next course of action. If the taxpayer does not respond within 30 days, the IRS issues a statutory notice of deficiency, which gives the taxpayer 90 days to file a petition to the Tax Court.
The Claims Court and District Court generally do not hear tax cases until after the tax is paid and administrative refund claims have been denied by the IRS. The tax does not have to be paid to appeal within the IRS or to the Tax Court.
A case may be further appealed to the U.S. Court of Appeals or to the Supreme Court, if those courts accept the case.
Remember the decision of the local IRS agent is not final.
You have appellate rights. Just for the record on staff of Fresh Start Tax , a former IRS appeals agent as well as tax attorneys to handle any appeals or Tax Court cases.
Federal Tax Audits, IRS Representation – Former IRS Management Representation – Affordable IRS Audit Experts
by Fresh Start Tax | Jun 3, 2013 | IRS Tax Audit, IRS Tax Experts
IRS Tax Audit Examination – Affordable Tax Audit Relief
Do not be bullied around by an IRS tax audit examination. Let former IRS agents and managers fight back because we know the systems and protocols.
Hire Former IRS Audit Managers and Supervisors for a IRS Tax Audit Examination.
We are local tax experts practicing right here in South Florida since 1982 and we are A+ rated by the Better Business Bureau.
Our firm has a combined 60 years of direct IRS work experience in the local South Florida IRS tax offices.
As former IRS Agents and Managers we worked in a local, district, and regional tax offices of the IRS.
If you are going to undergo a federal tax audit it only makes sense to hire former IRS agents, managers and tax instructors who know all the inner workings of the Internal Revenue Service.
We are comprised of tax attorneys, tax lawyers, certified public accountants, enrolled agents, and former IRS agents.
As former IRS auditors and managers we know all the protocols, all systems, and all the settlement formulas and techniques to marginalize any IRS tax audit.
While working at Internal Revenue Service we taught tax law and taught new IRS Agents the exact protocols for the IRS Tax Audit Examinations.
Why a IRS Tax Audit Examination
IRS audits federal tax returns to verify that the correct tax reported is correct.
Selecting a tax return for a IRS tax examination does not always suggest that the taxpayer has either made an error or been dishonest.
In fact, some IRS tax examinations result in a refund to the taxpayer or acceptance of the return without change. These are called no-changes.
The overwhelming majority of taxpayers files returns and make payments timely and accurately.
Taxpayers have a right to expect fair and efficient tax administration from the IRS, including verification that taxes are correctly reported and paid with enforcement actions against those who fail to comply voluntarily. There are procedures if you feel the tax auditor is targeting you or is unfairly dealing with your situation.
How do you when to hire a tax professional or do it yourself
Being a former IRS agent and instructor I can tell you that there are times that taxpayers may represent themselves during an IRS federal tax audit.
The rule of thumb is quite simple, if you have a clean tax return and have all documentation by all means represent yourself during an IRS tax audit examination.
If you have any issues, concerns, or problems that you think may arise it is absolutely in your best interest to hire a certified tax professional.
Your Taxpayer Rights during a IRS Tax Audit Examination
The IRS trains its employees to explain and protect taxpayers’ rights throughout their contacts with taxpayers. Sometimes this happens and sometimes it doesn’t.
These IRS Tax Audit Examination rights include:
1. A right to professional and courteous treatment by IRS employees.
2. A right to privacy and confidentiality about tax matters.
3. A right to know why the IRS is asking for information, how the IRS will use it and what will happen if the requested information is not provided.
4. A right to representation, by oneself or an authorized representative.
5. A right to appeal disagreements, both within the IRS and before the courts.
How IRS Tax Audit Examination Tax Returns Are Selected for Examination
The IRS selects tax returns using a variety of methods, including:
- Potential participants in abusive tax avoidance transactions. Some returns are selected based on information obtained by the IRS through efforts to identify promoters and participants of abusive tax avoidance transactions. Examples include information received from “John Doe” summonses issued to credit card companies and businesses and participant lists from promoters ordered by the courts to be turned over to the IRS.
- Computer Scoring. Some returns are selected for examination on the basis of computer scoring. Computer programs give each return numeric “scores”. The Discriminant Function System (DIF) score rates the potential for change, based on past IRS experience with similar returns. The Unreported Income DIF (UIDIF) score rates the return for the potential of unreported income. IRS personnel screen the highest-scoring returns, selecting some for audit and identifying the items on these returns that are most likely to need review.
- Large Corporations . The IRS examines many large corporate returns annually.
- Information Matching. Some returns are examined because payer reports, such as Forms W-2 from employers or Form 1099 interest statements from banks, do not match the income reported on the tax return. 1.4 million tax returns are audited via this information matching method.
- Related Examinations. Federal Tax Returns may be selected for audit when they involve issues or transactions with other taxpayers, such as business partners or investors, whose returns were selected for examination. Many times these IRS tax audit examinations carry through when corporate or partnership tax returns are audited and the IRS tax examiner feels it’s necessary to pick up the tax returns of individuals.
- Other. Area offices may identify returns for examination in connection with local compliance projects. These projects require higher level management approval and deal with areas such as local compliance initiatives, return preparers or specific market segments. Each district in each region has specialized tax audits. Many times these are referred to as the market specialization program audits. You can find a list of the market specialization program tax audits on our website.
It should also be known that IRS changes its tax examination audit strategies depending on administrations and current federal mandates. It is best to check with us directly to find out which programs and methods will be used during your IRS tax audit examination.
IRS Tax Audit Examination Methods
An IRS Federal examination may be conducted by mail or through an in-person interview and review of the taxpayer’s records.
The interview may be at an IRS office or at the taxpayer’s home, place of business, or accountant’s or tax professionals office.
Taxpayers may make audio recordings of interviews, provided they give the IRS advance notice.
If the time, place, or method that the IRS schedules is not convenient, the taxpayer may request a change, including a change to another IRS office if the taxpayer has moved or business records are there.
The audit notification letter tells which records will be needed. Taxpayers may act on their own behalf or have someone represent or accompany them. If the taxpayer is not present, the representative must have proper written authorization.
The auditor will explain the reason for any proposed changes. Most taxpayers agree to the changes and the audits end at that level.
IRS Tax Audit Examination Appeal Rights
IRS Federal Appeal Rights are explained by the examiner at the beginning of each audit. Taxpayers who do not agree with the proposed changes may appeal by having a supervisory conference with the examiner’s manager or appeal their case administratively within the IRS, to the U.S. Tax Court, U.S. Claims Court or the local U.S. District Court.
If there is no agreement at the closing conference with the examiner or the examiner’s manager, the taxpayer has 30 days to consider the proposed adjustments and their next course of action.
If the taxpayer does not respond within 30 days, the IRS issues a statutory notice of deficiency, which gives the taxpayer 90 days to file a petition to the Tax Court. The Claims Court and District Court generally do not hear tax cases until after the tax is paid and administrative refund claims have been denied by the IRS.
The tax does not have to be paid to appeal within the IRS or to the Tax Court. A case may be further appealed to the U.S. Court of Appeals or to the Supreme Court, if those courts accept the case.
IRS Tax Audit Examination – Affordable Tax Audit Relief – Miami, Ft.Lauderdale, Palm Beaches – CPA’s, Former IRS
