IRS Tax Audits – Tax Audit Representation – Former IRS Agent Expert Representation

January 25, 2013
Written by: Fresh Start Tax


 
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If you have received an IRS notice or letter that your income tax or your business tax return is to undergo an IRS audit call us today and speak directly to tax attorneys, CPAs, or former IRS agents.
Our professional staff is comprised of former IRS agents, office auditors, revenue agents,  former IRS managers, and former IRS appeals agents who have over 60 years of direct work experience at the IRS and the local, district, and regional offices of the Internal Revenue Service.
We can handle and negotiate any tax audit of any size and should you wind up owing any money to IRS we can work out a tax settlement for you.
Do not be afraid of an IRS tax audit.
Our  former IRS agents you know all the tax strategies and tax positions of the Internal Revenue Service and we will be able to minimize any difficulties or problems that may arise.
Being former IRS instructors we have trained former IRS agents and therefore know the strategies to get you the best possible results.
So, What is an IRS audit?
An IRS tax  audit is a review or examination of an organization’s or individual’s accounts and financial information to ensure information is being reported correctly, according to the tax laws, to verify the amount of tax reported is accurate. IRS audits about 1% of all tax returns.
The IRS Publication 556, Examination of Returns, Appeal Rights and Claims for Refund explains the audit process in more detail  or you can contact our office today and we can go over other details and options with you.
The IRS  Tax Audit Selection
Selecting a return for audit does not always suggest that an error has been made. however about 75% of the time changes are made after the tax audit.
Tax Returns, both business and personal  are selected using a variety of methods, including:
Random selection and computer screening.
Sometimes returns are selected based solely on a statistical formula.
Document matching – when payor records, such as Forms W-2 or Form 1099, don’t match the information reported. These type of tax audits are usually handled through mail correspondence.  There are approximately 1.4 million audits handles this way.
Related Tax Audit Examinations.
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 audit. Generally if a revenue agent from the Internal Revenue Service is auditing a company’s tax return they will many times find personal adjustments that have to be made on returns.
IRS Tax Audit Methods
An audit 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).
The IRS Agent, group or mail correspondence office will tell you what records are needed. Tax Audits can result in no changes or changes. Any proposed changes to your return will be explained  by follow-up letters and notices.
 Audit Notification
Should your tax return be selected for a tax audit, you will be notified in two ways:
1. By mail or,
2. By telephone
In the case of a telephone contact, the IRS will ALWAYS send a letter confirming the audit.
E-mail notification is not used by the IRS.
Should you ever get an email notification regarding a tax audit we can tell you definitively this is a tax scam and should be reported to Internal Revenue Service
Your Rights During an IRS Tax Audit
Publication 1, Your Rights as a Taxpayer, explains your rights as a taxpayer as well as the examination, appeal, collection, and refund processes.
These tax audit rights include:
a. A right to professional and courteous treatment by IRS employees.
b. A right to privacy and confidentiality about tax matters.
c. A right to know why the IRS is asking for information, how the IRS will use it and what d. will happen if the requested information is not provided.
e. A right to representation, by oneself or an authorized representative.
f. A right to appeal disagreements, both within the IRS and before the courts.
IRS Tax Audit Length
The length of each audit varies depending on the type of audit, the complexity of items being reviewed, the availability of information being requested, the availability of both parties for scheduling of meetings and your agreement or disagreement with the findings. Office audits usually last about a month and tax audits from revenue agents can last anywhere from two months to two years depending on the complexity of the case.
Tax Records that may be Needed
IRS will  provide with a written request for specific documents needed. IRS also reserves the right to make other documents available as it’s going through the tax audit.
The law requires you to retain records used to prepare your return.
Length of time tax record need to be kept
Generally, tax records should be kept for three years from the date the tax return was filed.
The IRS does accept some electronic records.
If records are kept electronically, the IRS may request those in lieu of or in addition to other types of records.
Contact your auditor to determine what can be accepted to ensure a software program is compatible with the IRS’s.
IRS Tax Audit Determinations
An audit can be concluded in three ways:
1. No change. An audit in which you have substantiated all of the items being reviewed and results in no changes.
2. Agreed. A tax audit where the IRS proposed changes and the taxpayer understands and agrees with the changes.
3. Disagreed. An audit where the IRS has proposed changes and the taxpayer understands, but disagrees with the changes.
AGREE With The Audit Findings
If you agree with the  IRS audit findings, you will be asked to sign the examination report or a similar form depending upon the type of audit conducted.
If money is owed
If money is owed, there are several payment options available. Publication 594, The IRS Collection process, explains the collection process in detail.
As a general rule IRS will ask for a financial statement before determinations are made of how paying back taxes are determined.
IRS will ask for a current financial statement with complete documentation. As a general rule IRS will either put your case in an economic tax hardship, ask for an installment agreement, or may recommend or consider you for an offer in compromise.
Once again your current financial statement will dictate the closing method that IRS will use.
DISAGREE with the Audit Findings
A conference with a manager may be requested for further review of the issue or issues. In addition, Fast Track Mediation or an Appeal request may be filed.
 
IRS Tax Audits – Tax Audit Representation – Former IRS Agent Expert Representation

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