IRS Audit Representation
Understanding IRS Audits
An IRS audit is a review conducted by the Internal Revenue Service to verify the accuracy of your tax return. The IRS examines income, deductions, and credits to ensure everything reported complies with federal tax laws.
While audits are intended to confirm compliance with the Internal Revenue Code and promote fairness in the tax system, receiving an audit notice can be overwhelming for both individuals and businesses. The process often feels intimidating, as it may involve providing extensive records, answering detailed questions, and navigating complex tax rules.
It’s important to remember that taxpayers have several rights during an IRS audit. You are entitled to professional and respectful treatment, the right to representation, and the right to appeal if you disagree with the IRS’s findings. Knowing and exercising these rights can make the difference between a stressful experience and a manageable one.
Booth P.C.’s experienced IRS attorney provides trusted defense and representation. We have a deep understanding about how the IRS works and stand ready to protect your interests while guiding you confidently through the audit process. Contact Booth P.C. for IRS audit representation in Texas.
What Does It Mean to Have IRS Audit Representation?
IRS audit representation refers to having a qualified professional—such as a tax attorney, CPA, or enrolled agent—speak and act on your behalf throughout the audit process. Representation plays a critical role in protecting your taxpayer rights, ensuring the IRS only reviews information relevant to your case, and that you are treated fairly under the law.
With Booth P.C.’s professional IRS audit representation, you don’t have to manage direct communications with the IRS. We handle correspondence, gathers and organizes necessary documents, and negotiates with IRS agents and officers, which helps prevent misstatements or misunderstandings that could negatively affect your outcome.
Hiring IRS audit representation in Texas provides significant benefits. Beyond reducing stress, they bring deep knowledge of tax laws, experience with audit procedures, and the ability to challenge or appeal IRS findings when necessary.
Booth P.C. offers experienced IRS audit defense representation. Whether you’re an individual or a business, our attorneys provide trusted guidance and advocacy to protect your financial interests.
What Are the Different Types of IRS Audits?
The IRS uses several types of audits to review tax returns, each varying in scope and complexity. Knowing which type of audit you’re facing is crucial, as it helps you prepare effectively and understand the level of documentation and defense required.
Correspondence Audits
These are the most common, but no less intimidating. Conducted entirely by mail, they usually address issues such as missing forms, income discrepancies, or verification of deductions. Responding promptly with the requested documents can resolve the matter quickly.Notarization is the most common method for durable power of attorney, as it streamlines validation and is widely accepted by institutions such as banks. The principal must have the mental capacity to understand the document’s purpose and effect at the time of signing.
Office Audits
These audits take place at an IRS office and require you to bring additional records for review. They typically involve more detailed questions about income, expenses, or specific deductions. Because the IRS examines broader aspects of your return, professional guidance can help ensure your presentation is thorough and accurate.
Field Audits
The most comprehensive type, field audits are conducted at your business, home, or representative’s office. IRS agents review extensive records and may scrutinize multiple years’ worth of information. Field audits can be highly intrusive and carry greater risk if errors are found.
For more complex audits, professional IRS audit representation is essential. Booth P.C. provides trusted guidance and advocacy across Texas to protect taxpayers and achieve the best outcomes.
Why Was My Tax Return Selected for an Audit?
Many taxpayers wonder why their return was chosen for review. In some cases, the IRS selects returns randomly through computerized scoring systems that compare your return against statistical norms. If your figures differ significantly from those of similar taxpayers, your return may be flagged for further examination.
Red Flags May Trigger an Audit
Other times, specific red flags can trigger an audit. These include reporting repeated business losses, unusually large deductions, unreported income, or foreign account activity. The IRS also executes programs designed to identify underreporting of income, often by cross-checking W-2s, 1099s, and other third-party records against your filed return. Discrepancies can quickly attract attention.
3 Year Statute of Limitations for Most Audits
It’s important to note that the IRS statute of limitations for audit typically allows the IRS to review tax returns filed within the past three years. However, if substantial errors or fraud are suspected, the timeframe may be extended up to six years or indefinitely in cases of fraud or tax evasion.
The best way to reduce audit risk is to maintain accurate and organized records and report income and deductions accurately and truthfully. If you are selected, professional representation can help protect your rights and ensure the audit is handled effectively.
Preparing for and Navigating the IRS Audit Process
The IRS tax audit process begins when you receive an official audit notice by mail. This letter outlines the tax year under review, the issues being questioned, and instructions for how to proceed. From that point, preparation is key to protecting your financial interests.
The first step is gathering documentation to support the information reported on your return. This may include:
- Receipts and invoices for expenses
- Bank and credit card statements
- Payroll records
- Business ledgers or accounting reports
- Proof of deductions or credits claimed
Responding within the stated deadlines is key, as delays can result in increased penalties or escalate the audit. While cooperation is important, you should not manage every interaction directly. Allowing an experienced IRS attorney to handle communications ensures accuracy, prevents unnecessary disclosures, and reduces stress.
During an audit, the IRS typically requests only the records related to the items being examined. Providing organized, relevant documents strengthens your defense and demonstrates compliance. As the audit progresses, however, the IRS can ask for additional information outside of the initial examination request, or expand the period or years under audit.
Strong IRS audit representation can identify potential issues before they escalate, negotiate effectively with examiners, and work to mitigate penalties. Booth P.C. guides taxpayers in Texas and throughout the country through every stage of the audit process with trusted advocacy.
What Happens if I Disagree with the Outcome of an Audit?
Disagreeing with the IRS’s audit findings is common and does not mean you are out of options. Taxpayers have clear rights to challenge the results and seek a fair resolution through the IRS appeals process,. The key is to act promptly, since deadlines for filing an appeal are strictly enforced.
Submit Written Protest
If you disagree with the outcome, you may first submit a written protest outlining the specific items you dispute and why. This protest should include supporting documentation and a clear legal or factual basis for your position. The IRS Office of Appeals, which is independent from the examiners who conducted your audit, will then review your case.
Administrative Hearing May Be Next
Appeals may involve an administrative hearing, where negotiations can take place to settle the dispute. Many cases are resolved at this stage without the need for litigation. However, if no agreement is reached, taxpayers have the right to take their case to the U.S. Tax Court or, in some cases, Federal Court. At Booth P.C. we have over 15 years of litigation experience in Federal Courts.
Retain Skilled IRS Representation Services for Best Results
Working with an experienced IRS attorney during this process is invaluable. Skilled representation ensures your protest is properly prepared, your rights are protected, and your chances of reducing additional tax liabilities or penalties are maximized.
Booth P.C. offers aggressive IRS audit representation throughout Texas. Our attorneys have extensive experience in audit defense, appeals, and tax court, helping individuals and businesses achieve fair outcomes and safeguard their financial interests
Frequently Asked Questions
How will I know if the IRS is auditing me or my business?
The IRS notifies taxpayers of an audit exclusively by mail, never by phone or email. The audit notice explains which tax year is under review, the required records, and the scope of the audit. It may be conducted by mail (correspondence audit) or in person at an IRS office or your location. Please carefully review the letter, as it provides important deadlines and contact information. Failing to respond to an audit notice can result in penalties or enforced assessments.
Can I handle an IRS audit on my own without professional help?
Yes, you can represent yourself in an IRS audit, but it’s very challenging. Audits require detailed record-keeping, familiarity with tax law and regulations, and the ability to respond and communicate clearly to IRS examiners. Mistakes, omissions, or unclear answers may complicate your case. While someone with simple issues may sometimes be able to manage independently, professional guidance helps protect your rights, reduces stress, and potentially minimizes financial exposure.
What are the benefits of hiring an attorney or tax professional for audit representation?
Hiring a tax attorney or professional ensures experienced representation during an IRS audit. They understand IRS procedures, help organize records, and present your case strategically. A professional can negotiate directly with the IRS on your behalf, shielding you from stressful interactions. They also identify potential issues before they escalate, reducing the risk of additional penalties.
How long does an IRS audit usually take?
The length of an IRS audit varies depending on its complexity, the number of issues reviewed, and how promptly you provide the requested documents. Simple correspondence audits typically conclude within a few months, while more complex field audits can last over a year. Delays often occur if records are incomplete or additional years are examined. Generally, most standard, non-complex audits wrap up within 12 months.
What are my rights during an IRS audit?
Taxpayers have important rights during an IRS audit. These include the right to professional and courteous treatment, the right to be informed about the audit process, and the right to representation by an attorney, CPA, or enrolled agent. You may also appeal IRS decisions, request clarification, and only provide records relevant to the audit. Additionally, you are protected against unreasonable IRS requests or harassment.
Can an IRS audit result in criminal charges?
Most IRS audits are civil matters focused on correcting errors and collecting additional taxes if needed. However, if auditors suspect intentional fraud, such as falsifying income, hiding assets, or claiming improper deductions, the case may be referred to the IRS Criminal Investigation Division. Criminal tax cases are rare but serious, potentially leading to prosecution, fines, or imprisonment. If this happens to you, you should retain legal representation immediately.
How far back can the IRS go when auditing my returns?
Typically, the IRS can audit tax returns filed within the last three years. However, if the IRS discovers substantial errors, such as underreporting income by more than 25%, the audit window extends to six years. In cases of suspected fraud or failure to file, there is no statute of limitations, meaning the IRS can review records indefinitely.
What are the potential penalties if the audit finds errors?
If an IRS audit uncovers errors, the penalties vary depending on whether they stem from negligence, substantial understatement, or fraud. Common outcomes include additional tax owed, interest on unpaid amounts, and accuracy-related penalties of up to 20% of the underpayment. Fraud-related findings can carry far steeper penalties, sometimes exceeding 75%.
How does the IRS decide who gets audited?
The IRS uses several methods to select returns for audit. Some are chosen randomly, while many are flagged through computer scoring systems that identify inconsistencies or unusual deductions compared to similar taxpayers. Others result from discrepancies in third-party reporting, such as mismatches between W-2s or 1099s and your reported income.
What options for representation are available for you in dealing with the IRS?
Taxpayers have the right to representation when dealing with the IRS. You may retain a tax attorney, certified public accountant (CPA), or enrolled agent to act on your behalf. Booth P.C. professionals can attend meetings, submit documents, and communicate directly with IRS agents, relieving you from direct involvement. Legal representation is particularly valuable in complex cases or when potential penalties are significant. Contact Booth P.C. today to discuss your situation.
Speak to Us Today
You worked hard for your money and property over many years. Secure your legacy today! Consult Texas Tax & Estate Law to craft a valid will and estate plan, navigate community property laws, and streamline probate. Protect your family’s future and contact us today!
