IRS TAX AUDIT REPRESENTATION

IRS audit notices frighten most tax payers. The tax professionals at QAC Accounting & Consulting can help you survive an IRS audit. We have a lot experience helping clients complete audits with a minimal amount of disruption and stress.

Our Accountants know how to organize your return to show your position to best advantage. Before the scheduled IRS audit appointment we will work with you to clarify and justify those areas questioned. We will help you show an auditor the information requested in a straight-forward, factual manner.

When questioned numbers result from the taxpayer viewing tax rules in a way not initially understood by the auditor, we help present and argue for your responsible interpretation of the rules.

No one knows for sure what triggers an IRS audit. It could be random selection or it could be that your return has deductions that are out of the statistical norm for your profession or business industry.

We are determined, and we fight for our clients. However, we are not confrontational nor disrespectful to the auditors. We deliver your information to the IRS in a smooth and graceful way while avoiding landmines. We believe that good audit planning and information organization allow you to go into an audit with the financial data, analysis, and backup information that will smooth the audit process. Appearing at the audit with exhibits such as vehicle logs and description of business meals speeds the resolution of the audit.

We know what backup documentation is helpful and we can help you prepare it. We have helped many clients survive audits that resulted in no change in taxes owed. By maintaining professional, cordial relationships with IRS auditors, we believe we minimize the pain and effort involved. We work with the auditor to build rapport in our shared goal of completing the work.

Of course, sometimes an audit uncovers client errors. We also help clients when they have made mistakes in their tax returns. We work with clients to clarify the true tax situation and present the updated information to the auditor in a calm, factual way.

We have been successful in having penalties waived in some cases where the error was inadvertent, and we have minimized overall IRS tax bills.

Your privacy is safe with QAC Accounting & Consulting.

What is an IRS Audit?

An IRS audit is a review/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.

Publication 556, Examination of Returns, Appeal Rights and Claims for Refund explains the audit process in more detail.

Audit Selection. Selecting a return for audit does not always suggest that an error has been made. Returns 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 payer records, such as Forms W-2 or Form 1099, don't match the information reported.
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 audit.

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 will tell you what records are needed. Audits can result in no changes or changes. Any proposed changes to your return will be explained.

Audit Notification. Should your account be selected for audit, you will be notified in two ways:

By mail, or
By telephone

In the case of a telephone contact, the IRS will still send a letter confirming the audit. E-mail notification is not used by the IRS.

Your Rights During an 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 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.

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.

Records Needed. You will be provided with a written request for specific documents needed.

The law requires you to retain records used to prepare your return. Those records generally 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.

Audit Determinations. An audit can be concluded in three ways:

No change: an audit in which you have substantiated all of the items being reviewed and results in no changes.
Agreed: an audit where the IRS proposed changes and the taxpayer understands and agrees with the changes.
Disagreed: an audit where the IRS has proposed changes and the taxpayer understands, but disagrees with the changes.

What Happens When You AGREE With The Audit Findings? If you agree with the 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, there are several payment options available. Publication 594, The IRS Collection process, explains the collection process in detail.

What Happens When You DISAGREE with the Audit Findings? A conference with a manager may be requested for further review of the issue or issues. In addition,Appeals Mediation Programs or an Appeal request may be filed.

Information taken from IRS.gov