Fresh Start Tax LLC A Professional Tax Firm “A” Rated by the Better Business Bureau
Practicing Tax Representation since 1982. Former IRS Agents, Managers and Instructors. We are one of the nations premier tax firms for IRS Tax Audits. We have over 140 years of tax experience.
Fresh Start Tax wants to inform our clients on the issue of ” How far back can IRS go during a IRS Tax Audit.
So, how far back can the IRS go to audit my return?
Generally, 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.
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.
The IRS Tax Audit can be a painless process. Call us for a free initial tax consultation.
Fresh Start Tax LLC A Professional Tax Firm Practicing Tax Law with a specialty in IRS Tax Representation. “A” Rated by the BBB
Do not be bullied by an IRS Tax Audit. Fight back with Former IRS Agents, Managers and Tax Instructors. We know all the loopholes.
Doing business in South Florida since 1982. Former IRS Agents and Managers who worked in the South Florida IRS Offices.
We are one of the most experienced tax firms in the South Florida area. We have a former IRS Audit Manager on staff.
The IRS Tax Audit: These are the most common questions asked about IRS audits. Provided by Fresh Start Tax
Does the IRS ever contact a taxpayer or the tax preparer via e-mail to initiate an audit?
The IRS does not contact an individual via e-mail for an initial appointment. Contact related to being selected for an audit will be made via telephone or mail only, due to disclosure requirements.
Does filing an amended return affect the return selection process?
Filing an amended return does not affect the selection process of the original return. However, amended returns also go through a screening process and the amended return may be selected for 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 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.
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.
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.
It’s time for my appointment and I’m not ready. What do I do?
If you do not have all the information requested, contact your auditor at the number reflected in the notification letter to discuss what information is currently available. It may be possible to begin the audit with the information available rather than postpone the appointment. The quicker the audit begins, the quicker it can be resolved. In addition, if the initial appointment is scheduled beyond 45 days from the initial action, managerial approval is required.
How far back can the IRS go to audit my return?
Generally, 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.
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.
The IRS Tax Audit can be a painless process. Call us for a free initial tax consultation.
If you are wanting to Settle with the IRS on your tax Debt, make sure you understand the program before you give your money to some tax mill. Many companies advertise “Settle IRS Debt ” to the peril of many taxpayers. You can get ripped off.
The Internet is full of companies saying they can settle for pennies on a dollars, settle your IRS debt , fast and quick settlements. While it is very possible, the odds are stacked up against you.
Many of these companies that advertise pennies on a dollars have a salesperson originally speak to you and size you up. They charge you a huge fee , take out a commission and then pass it on to a third party company or to the corporate headquarters where a person who will work your case has no idea at all what the salesperson told you.
Check the Internet and the number of complaints these companies have against them. The IRS put out a warning last year against these tax mills and the Attorney General is actively pursuing to put these companies out of business.
What to look for in hiring a tax professional firm.
1. Check the BBB listing of the company you want to engage.
2. Check to see if there is a tax professional on staff, a CPA, a Board Certified tax attorney or all three.
3. See how long the company has been in business.
4. Be sure that the company has not changed their name. Many of these tax resolution companies change their name every two years.
5. Speak to the professional that will work your case. See if they know their business. Ask for credentials.
6. Find out how many IRS cases the person working your case has been involved with. How long have they practiced tax law?
7. Ask how many offers or settlements the company has on their record. Has there been a case like yours?
8. Former IRS Agents. Former IRS Agents know all the rules regulations and latest tax changes.
9. Do not be fooled by the initial sales approach. Many claims the salesperson makes when first talking to the salesperson are just hype, so beware.
10. Ask about the fee. Professional companies do not charge a results accomplished fee.
So remember, experience, history, BBB report and by all means hire former IRS Agents.
Fresh Start Tax A Professional Tax Firm “A” Rated by the Better Business Bureau specializing in IRS Tax Representation . We are former IRS Agents, Managers and Instructors as well as Board Certified Tax Attorneys and CPAs.
We specialize tax trying to be collected by the IRS citizens of other countries now living in the United States. We fight to keep your money!!!!
Call us today for a free professional tax consultation.
In recent years, as our economy becomes more global, more and more U.S. taxpayers are participating in offshore activities for both legitimate and illegitimate purposes.
Taxpayers who participate in offshore activities for illegitimate purposes seek to shelter financial resources in foreign countries. Offshore accounts can be located in any country in the world. Useful records can be obtained from foreign countries regarding theses taxpayers.
International cases require methods not normally used in the domestic arena. Some of these methods are:
Exchange of Information (EOI)
Consent Directives
Letters of Request
Exchange of Information
The United States has tax treaties and tax information exchange agreements (TIEAs) with many countries that provide for the exchange of information on tax matters.
See IRM 5.1.8.7.7, Incoming Mutual Collection Assistance Requests regarding mutual collection assistance requests with the five treaty countries of Canada, Denmark, France, Netherlands and Sweden.
The information requested may contain items that are reported or omitted on a taxpayer’s return or regarding the whereabouts of the taxpayer when the taxpayer no longer resides at the last known international address of record and in a delinquent return investigation to determine income and credits of the taxpayer.
Access a list of countries that have an income tax treaty and/or a TIEA with the United States at: http://www.irs.gov/pub/irs-apa/treaty.pdf
All Exchange of Information requests with a foreign country are handled by the IRS Tax Attaché, Revenue Service Representative (RSR) or Exchange of Information (EOI) group, as applicable, with the responsibility for handling request to the country where the information is located.
See IRM 4.60.1 , Exchange of Information for more information on Exchange of Information between the United States and foreign countries.
Tax Attachés and Deputy Tax Attachés serve in IRS overseas posts of duty and Revenue Service Representatives (RSRs) and Assistant Revenue Service Representatives (ARSRs) serve in IRS domestic posts of duty. Tax Attaches and RSRs service all functions of the IRS in tax administration matters within their respective post jurisdictions.
The Exchange of Information Program administers the Exchange of Information provisions of U.S. tax treaties and tax information exchange agreements (TIEAs). EOI helps IRS field personnel obtain information from foreign countries, works with IRS field personnel to provide information to certain foreign countries, and coordinates the Mutual Collection Assistance provisions of certain treaties.
All Exchange of Information requests with a U.S. Territory or State are handled by the Office of Governmental Liaison.
Types of Exchange of Information
The types of information that may be exchanged under an Exchange of Information include but are not limited to:
Tax returns and return information such as verification of filing status, citizenship, residency, income, expenses and tax liability,
Third party information return filings,
Bank records,
Business records,
Public records such as deeds, birth, death and marriage records, and
Witness interviews.
Exchange of Information Procedures – Foreign Country
Exhaust all domestic sources for information before requesting information from a foreign country.
In general, if the information can be obtained domestically, then a tax treaty or TIEA request is normally not appropriate.
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Fresh Start Tax 1-866-700-1040 “A” Rated by the Better Business Bureau We are a Professional Tax Firm that specializes in IRS Representation on the Mutual Collection Assistance Program.
The United States has treaties with several countries allowing the IRS to collect tax from these treaties that they have with these other countries. This is called the Domestic Tax Provision.
There are certain IRS offices that specialize in this tax collection. We are one of the Nations best firm in the area of tax representation.
Call us today for a free tax consultation.
In recent years, as our economy becomes more global, more and more U.S. taxpayers are participating in offshore activities for both legitimate and illegitimate purposes.
Taxpayers who participate in offshore activities for illegitimate purposes seek to shelter financial resources in foreign countries. Offshore accounts can be located in any country in the world. Useful records can be obtained from foreign countries regarding theses taxpayers.
International cases require methods not normally used in the domestic arena. Some of these methods are:
Exchange of Information (EOI)
Exchange of Information
The United States has tax treaties and tax information exchange agreements (TIEAs) with many countries that provide for the exchange of information on tax matters.
Incoming Mutual Collection Assistance Requests regarding mutual collection assistance requests with the five treaty countries of Canada, Denmark, France, Netherlands and Sweden.
The information requested may contain items that are reported or omitted on a taxpayer’s return or regarding the whereabouts of the taxpayer when the taxpayer no longer resides at the last known international address of record and in a delinquent return investigation to determine income and credits of the taxpayer.
Note:
Access a list of countries that have an income tax treaty and/or a TIEA with the United States at: http://www.irs.gov/pub/irs-apa/treaty.pdf
All Exchange of Information requests with a foreign country are handled by the IRS Tax Attaché, Revenue Service Representative (RSR) or Exchange of Information (EOI) group, as applicable, with the responsibility for handling request to the country where the information is located.
See IRM 4.60.1 , Exchange of Information for more information on Exchange of Information between the United States and foreign countries.
Tax Attachés and Deputy Tax Attachés serve in IRS overseas posts of duty and Revenue Service Representatives (RSRs) and Assistant Revenue Service Representatives (ARSRs) serve in IRS domestic posts of duty. Tax Attaches and RSRs service all functions of the IRS in tax administration matters within their respective post jurisdictions.
The Exchange of Information Program administers the Exchange of Information provisions of U.S. tax treaties and tax information exchange agreements (TIEAs). EOI helps IRS field personnel obtain information from foreign countries, works with IRS field personnel to provide information to certain foreign countries, and coordinates the Mutual Collection Assistance provisions of certain treaties.
All Exchange of Information requests with a U.S. Territory or State are handled by the Office of Governmental Liaison.
Being former IRS Agents and Managers we can give you tax tips to help prepare you for an IRS Audit. Know from the being, never represent yourself unless you know for sure your tax records are squeaky clean. If that is the case, by all means represent yourself.
1. Should you decide to hire professional tax help, I urge everyone, hire a professional tax firm that have multiple tax professionals on staff. Many times, partners kick around issues so you have at least two people looking at your case. Also, if your main tax representative is sick or has other issues, there is someone else to pick up the slack.
2. If you handle your own audit and a revenue agent is working your case, never meet at your business if you can help it. Meet at a neutral site. If you have it at your place of business, other employees or client/customers many feel something is wrong and start asking a lot of questions. Keep it private.
3. Make sure you contact the IRS Agent or Auditor promptly and meet all deadlines. IRS Agents many times are graded on how fast cases are closed. If you slow the process up for them, you may by at the wrong end of their wrath.
4. Be completely prepared and organized for the audit. The IRS audit letter will address issues the IRS is looking at. Make copies of documents and never give the IRS original documents. The more organized you look is a great sign you have done the right things.
5. If a tax liability is going to be owed always appeal. Many times the Supervisor does not want to have your case go to appeals and may come back and make an audit adjustment.
6. If you have to go to appeals, try to obtain documents or reconstruct tax records where a third party appeal agent may look at and think, ” I will allow this, it makes sense.” Reconstructed records can fly with the IRS.
7. Bring only documents requested and nothing else. This often times limits the scope of the investigation.
8. Do not bring prior year’s returns. If the IRS finds adjustments to the years they are looking at, they may want to go back further and will let you know.
9. If the audit is taking place at the beginning of a tax year do not file that year’s return. Put it on extension. If you do not, the IRS may pull the year for a tax audit.
10. Hire the most experienced tax firm you can find. Make sure they have Former IRS Agents on staff.
