How Long Have You Been Handling Tax Audit Cases?
I’ve been handling IRS tax audits for almost 10 years. During this period, I have assisted more than one thousand individuals and businesses in dealing with IRS audit proceedings. I also helped hundreds with subsequent appeals and litigation proceedings when we were unable to resolve the case through the initial audit.
What Is a Field Audit?
An IRS field audit is an audit that occurs either at the taxpayer’s home or place of business. If you are hiring an attorney to represent you, the attorney may be able to change the location to the attorney’s office, which will make the audit less intrusive. IRS field audits are handled by IRS revenue agents, whereas office audits are generally handled by tax compliance officers. IRS revenue agents are more trained than the tax compliance officers and will be able to scrutinize your tax return, the income reported and the deductions claimed to a larger extent than other IRS staff.
How Serious Is Any Audit? Should I Be Scared?
An IRS audit can be very serious depending on the issues involved in the audit. In the most serious cases, an IRS audit can result in a referral to the IRS Criminal Investigation Division. The Criminal Investigation Division will determine whether or not they want to send the case to the US attorney’s office to prosecute the case for tax crimes. Even if your case is not referred to the Criminal Investigation Division, an audit can result in very large financial liabilities.
If the IRS determines that a civil fraud penalty should apply, then it charges a 75% penalty on top of the proposed tax liability that they determine you owe. For many individuals and businesses, my office has been able to move the fraud penalty down to a 20% accuracy-related penalty. In some cases, we have been able to remove the penalty entirely. Even if a fraud penalty doesn’t apply, the IRS will attempt to charge a 20% accuracy-related penalty or a 20% negligence penalty. These penalties can also be removed if the taxpayer can show reasonable cause for the position taken on their tax return. My office has a lot of experience assisting taxpayers in removing accuracy and negligence penalties charged by the IRS.
How Can An Attorney Assist Me When I Am Being Audited?
The most important advantage to hiring an attorney for your tax audit is the attorney-client privilege. If you hire an accountant or a CPA and the IRS decides to pursue the matter criminally, then the IRS can force your CPA or accountant to testify against you in a criminal case. This is because an accountant or CPA privilege does not apply in criminal cases. An experienced tax attorney is also seasoned to address any proposed IRS adjustments, research relevant case law to assist you in your case, and send written memoranda in response to IRS audit reports to dispute any proposed adjustments by the IRS. CPAs and accountants are generally not trained to do research and write legal memoranda to dispute such issues.
Why Should I Not Simply Work With The IRS Myself When Being Audited?
Depending on the severity of your tax audit or tax issue, it’s a good idea to hire an attorney for various reasons. First, you do not want to expose yourself to any liability based on statements that you could have withheld. An experienced attorney will guide you through the audit and make sure you only provide the limited scope of information and documentation requested during an audit. Second, an attorney can review any potential discrepancies, and can use case law and other precedents to defend or further dispute your case in appeals or tax court. Most individuals also wouldn’t know procedurally how to dispute a case further and what options they have in disputing a case or a proposed IRS audit.
For more information on Tax Audits In California, a free initial consultation is your next best step. Get the information and legal answers you are seeking by calling (714) 321-3369 today.
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