Being audited by the IRS is one of the greatest fears that the average American taxpayer can think of. However, most people don’t realize that many audits can be easily resolved, and can result in no additional taxes. In the event your tax return is audited, it is important to realize that you do have the ability to represent yourself in front of the IRS.
If your tax return is selected for an audit, generally the audit will be via correspondence. You will receive a letter from the IRS asking for you to confirm information obtain from your tax return. The information the IRS requires is either to support a tax deduction or a tax credit you took when you filed your tax return. It can also ask about income that was missing from a tax return. If you have the information, by simply returning the information to the IRS, you can fulfill the requirements of the audit.
In some cases, a more thorough examination may require the audit to take place in either your home, place of business, or the IRS office. In any of these cases, you still have the right to represent yourself at the audit. You will always be notified prior to the audit of what records you will need to provide. During the audit, the IRS examiner will notify you if they deem any changes are necessary to the tax return. It is important that you are clear with any proposed changes. Do not hesitate to ask questions to the examiner, or request they make clear why the changes are warranted.
If for some reason, changes are made to your tax return, and you disagree with the changes, be aware that you have the right to appeal the audit changes. The IRS has an Appeal Office that will take a closer look at the circumstance surrounding the audit. Appeals are completed similar to the audit process – either by correspondence, by telephone, or in person. Usually, most differences are settled at this level. However, if you find yourself in disagreement with the IRS further, you also have the right to appeal to the one of several US courts that are independent from the IRS. Although you can also represent yourself in court, it is recommended that due to the intricacies involved with court cases, from this point you may want to obtain representation from an experienced tax attorney.
Please keep in mind the information and advice presented in this blog is not intended to be used as formal legal advice. Contact a tax professional for personalized tax advice pertaining to your specific situation. While we try and answer all parts of the question when we write our blogs, sometimes there may be some left unanswered. If you have any questions about your problems with the IRS, SBOE, FTB, or BOE, or tax law in general, call RJS Law at (619) 595-1655.