IRS Tax Audit Representation Services

An IRS audit is a review or examination of an individual’s or organization’s financial and tax information to verify that the information is reported correctly according to tax laws and to verify that the amount of tax reported is accurate. The IRS conducts audits either through random selection, when there are discrepancies in a tax return, or when the return shows “red flags” like high deductions relative to income or unreported income.

According to a Comprehensive Taxpayer Attitude Survey (CTAS), over 60% of educated taxpayers are influenced by fear of undergoing a tax audit. This shows how significant audit sessions can be, and further solidifies why you need to engage professional tax audit representation services to be sure you’re safe from any IRS troubles. At Victory Tax Lawyers, we have audit representatives ready to speak with you today, who are knowledgeable of income tax audit situations, tax refunds for business purposes, and answers to any additional tax or tax refund questions you may have. Contact us today for a free attorney consultation.

IRS audit representation, also known as IRS audit defense representation, is when a tax professional, like a tax attorney or CPA, represents a taxpayer during an IRS audit. Instead of dealing with the IRS directly, you have an expert who communicates with the IRS on your behalf. This representative helps gather and present the necessary documents, answers questions, and defends the taxpayer’s position.

Each and every citizen deserves proper representation. If you struggle with an audit problem, you reserve the right to tax audit representation. You can count on Victory Tax Lawyers’ authorized representatives to protect your rights, while thoroughly guiding you through the audit process. If you’ve been hit with an IRS audit, our tax attorneys can guide you through the entire process.

The first step in receiving an audit is to take a deep breath and try to remember the fact that 70% of audits are simply asking for further information regarding your tax returns. You’ll likely be required to mail back forms answering questions about your income or deductions. However, in the event you fall under the other 30% of audits, you’ll be invited to meet with an IRS agent to discuss your tax forms. But even in this lesser of the likely events, remain calm and follow these helpful tips.

Do not ignore the letter – One thing you should never do upon receiving an IRS audit notice is ignore it. Avoiding this may make things worse for you. You should do one of two things upon receiving an IRS audit notice in the mail: respond as fast as you can, or decide if you need an IRS audit representation.

• Respond as quickly as possible – Consult your audit representative on whether you should ask for more time to gather all the necessary paperwork.
• Decide if you need IRS audit representation – If you can’t find or provide the requested information, consult with a professional to determine your next step. However, if you’ve been summoned to meet with an IRS agent, you should seek counsel from an authorized representative. This can be an experienced tax attorney or accountant who has handled similar meetings. Upon granting your audit representative power of attorney, you’ll no longer be required to sit in on the meeting.

As much as you might think hiring an attorney is a sign of guilt to the IRS agent, it frankly is their preference. By employing a lawyer to represent you, your requested information will be presented in a prepared and professional manner, ultimately making all parties’ jobs easier.

Only answer their questions – When meeting with an IRS agent, they will ask you specific questions regarding your tax information, in addition to requests for receipts and forms. Only around 2% of tax audits are random, so come prepared to share.

During the interview, answer all of the agent’s questions to the best of your ability. This is your chance to make your case against what the IRS believes. Convince them you’re being honest and forthcoming with all information. Having said all of that, there’s no need to overshare. Simply answer the questions you’re asked with confidence and clarity. Your authorized representative will handle everything else for you.

Negotiate and appeal – Following the audit, the IRS agent will conclude any further taxes and penalties owed. However, like any legal process interpreting the law, an appeal process is available. Appealing can be a form of negotiation as the IRS may consider striking a deal in order to prevent the prolonging of the case. Once again, this is a scenario in which hiring an audit representative, preferably an attorney with experience in tax negotiation, will significantly help your situation. An experienced tax attorney will know that the IRS’ lawyers are willing to negotiate and settle in order to avoid going to court.

There are four main types of IRS audits. Each type of audit varies in scope and level of scrutiny, and the IRS selects the type based on the complexity of the tax return and any potential issues it identifies.

1. Mail Audit (Correspondence Audit): This is the simplest type, conducted entirely by mail. The IRS will request specific documents or information to clarify certain items on a tax return, such as proof of deductions or income. Taxpayers simply mail in the required documents, and if everything is in order, the audit is resolved without further action.
2. Office Audit: In this type of tax audit, the taxpayer is asked to visit an IRS office to meet with an auditor. Office audits are more detailed than mail audits and typically focus on specific parts of the tax returns. Taxpayers are usually required to bring documents and financial records related to the questioned items, and they may choose to have a representative (like a tax attorney) present.
3. Field Audit: This is the most comprehensive type of audit, where an IRS agent visits the taxpayer’s home, business, or accountant’s office to conduct a thorough review of records. Field audits are often more intensive and cover broader areas of the tax return. They’re usually reserved for more complex cases, such as audits of businesses or high-income individuals.
4. Taxpayer Compliance Measurement Program (TCMP) Audit: This type of audit is used to gather data on taxpayer compliance levels. TCMP audits are very detailed and require the taxpayer to provide documentation for every item on their tax return, not just specific areas. The IRS uses the information from TCMP audits to update and refine its audit selection process. Because of their comprehensive nature, these audits can be time-consuming, and they’re relatively rare.

Based on the scope of the services that the taxpayer wants, tax audit representation services can be categorized into three main scopes:

1. Full Representation

Full representation during an IRS audit means that a tax professional, like a CPA, tax attorney, or Enrolled Agent (EA), fully supports and defends the taxpayer throughout the audit. This type of representation is essential when there’s a high risk of legal issues or when the taxpayer cannot represent themselves due to being unavailable or unable.

With full representation, the tax professional takes charge of handling the audit process. They understand tax laws, ensure that all rules and regulations are followed, and advocate for the taxpayer’s best interests. This level of support protects the taxpayer’s rights, helps them comply with all necessary requirements, and works to prevent any financial or legal problems that could arise during the audit.

2. Partial Representation

Partial representation in a tax audit means a tax professional helps a taxpayer with specific parts of an audit rather than handling the entire process. In partial representation, the tax professional’s role is limited, providing support only in certain areas where the taxpayer may need expert guidance.

This approach is often used when an audit is fairly simple, and the taxpayer can manage most of it on their own but wants help with more complex or unclear parts. The taxpayer remains in charge of the audit, using the tax professional’s knowledge to address challenging areas accurately and ensure they’re following the rules when dealing with tax authorities.

3. Consultation Services

In a tax audit, consultation services mean a tax professional provides advice, insights, and guidance to help taxpayers handle the audit process on their own. Although the professional doesn’t represent the taxpayer directly during the audit, their advice helps the taxpayer stay compliant with all rules and avoid potential financial issues.

This service is valuable for taxpayers who choose to manage the audit themselves but recognize the importance of expert advice. With consultation services, taxpayers get the benefit of professional guidance to navigate the often complex audit process, making sure they follow all the necessary regulations. This approach helps taxpayers avoid mistakes, improves their chances of a good audit outcome, and provides peace of mind.

What makes the right type of IRS audit representation depends on several key factors, including the complexity of the audit, the taxpayer’s knowledge of tax issues, and potential legal concerns. For complex audits, full representation is often needed to handle the detailed rules and requirements involved.

The taxpayer’s understanding of tax matters also affects the choice. Taxpayers with good knowledge might only need consultation services for guidance, rather than full or partial representation. Financial considerations are also important. Full representation, while thorough and reassuring, usually costs more than partial representation or consultation services. So, selecting the right type of audit representation involves balancing these factors to ensure effective support that fits both the case and budget.

Understanding the core qualifications for audit representatives demystifies the process and allows taxpayers to make informed decisions while selecting a representative.

Certified Public Accountant (CPA)

A Certified Public Accountant (CPA) is a highly skilled and trusted professional in the field of accounting, with a mix of extensive training and the successful completion of a challenging exam. This designation is given to those who have mastered various areas of accounting and tax, allowing them to assist with tax preparation, financial audits, and representing clients before tax authorities.

To become a CPA, candidates must meet certain educational requirements, usually a bachelor’s degree in Accounting or a related field, plus additional hours of study in accounting. They also need to pass the Uniform CPA Examination, a rigorous test that covers topics like auditing, financial reporting, regulation, and business concepts. The exam is to confirm that only those with a strong grasp of these areas can become CPAs. Additionally, CPAs must follow a strict code of ethics and complete ongoing professional education to keep their certification, ensuring their knowledge stays current as the financial and tax fields evolve.

Enrolled Agent (EA)

An Enrolled Agent (EA) is a unique type of tax professional licensed by the IRS to represent taxpayers in dealings with the IRS, such as audits, collections, and appeals. EAs are highly knowledgeable in tax laws, having either passed the challenging Special Enrollment Examination (SEE) or gained relevant IRS work experience to earn their credentials.

EAs must follow strict ethical standards and complete ongoing education to stay up-to-date with changing tax laws and policies. They can represent clients before the IRS in all 50 states, giving them the flexibility to support clients nationwide. This makes EAs valuable allies for taxpayers, offering skilled guidance and support through the often complex IRS processes.

Tax Attorney

Tax attorneys are lawyers who specialize in tax law, focusing on understanding and handling the complex rules of tax codes and regulations. To become a tax attorney, they must first earn a Juris Doctor (JD) degree and be licensed by the state bar. Many also pursue a Master of Laws (LLM) in Taxation to deepen their expertise.

Tax attorneys assist a variety of clients, from individuals to large companies, in understanding and managing tax laws. They represent clients in court for tax disputes, audits, and legal issues, working to protect them from legal risks and reduce their tax liabilities. Besides legal representation, tax attorneys also offer valuable advice in tax planning and compliance, helping clients make informed decisions and stay well-prepared in their financial activities.

Our clients can benefit from our expertise in a number of ways. We will advocate on your behalf in a professional and legal procedure. A qualified lawyer will help you stand up to the financial documentations noted against you by the IRS.

Our team has detailed some of the various ways we can help you fight against and settle tax disputes:

• Act as a direct line of communication
• Identify which portion of your return is being audited
• If applicable, eliminate a proposed tax issue
• Negotiate an IRS-suggested total tax problem
• Present an Offer in Compromise (OIC)
• Present an Installment Agreement
• Protect your rights as a U.S. taxpayer
• Financial savings; to not pay what you do not owe
• Help on Notice CP22E
• Maintain and organize necessary paperwork
• Defend audit and appeal if applicable

As the best tax lawyers for IRS audit in Los Angeles, Victory Tax Lawyers’ experienced attorneys display a strong skill set and determination in the practice of law. Our team can help you file taxes, in addition to handling your situation in the event of an IRS tax audit.

With an impressive combined number of years of academic and professional experience, our attorneys understand the practices of the Internal Revenue Service to its full extent. Our attorneys have dedicated themselves towards navigating taxpayers through what may seem to be an endlessly complicated process. But you need not worry.

Our attorneys have been providing IRS Representation for our clients for years. With a proper letter of representation, audit processes will be a breeze for our clients. At Victory Tax Law, we navigate our clients through every step of the way to instill confidence and assurance throughout their tax-filing season.

If you have been audited by the Internal Revenue Service, or have any questions regarding our services, please contact Victory Tax Lawyers today. Visit our website for more information regarding the firm, our services, and any legal updates surrounding the Internal Revenue Service’s rules and practices.