Keep the Tax Auditor at Bay
No matter how well-prepared you are, a tax auditor can come knocking at your door at any time. Although you can attempt to deal with an audit yourself, you could ultimately save you or your business thousands of dollars if you seek professional tax audit help.
You can technically deal with a tax auditor on your own, but the experience is likely to leave you feeling confused and uncomfortable. That’s because most professional tax auditors know that you aren’t familiar with current tax laws, and they use this knowledge to their advantage. This confusion provides them with an opportunity to intimidate you if you aren’t properly represented.
There are many ways to develop an outstanding tax audit defense. Here are just a few ways a professional can make the audit process go much more smoothly:
- Reviewing the tax authority notice with you, explaining what each point means
- Researching all issues involved in the audit
- Assembling documents and records
- Communicating directly with the IRS
- Reviewing the tax audit findings with you
- Assistance with the appeal process, if you disagree with the auditor’s findings
Quality tax auditor assistance for all IRS auditing methods
All audits are not created equal. To further confuse the matter for those who are not familiar with tax laws and procedures, there are multiple ways the IRS can move forward with an audit:
- Correspondence, which involves a mail-away audit
- Office audit, which requires you to appear at an IRS office
- Field audit, which involves the IRS auditor visiting you in person, announced or unannounced
No matter what kind of audit you’re facing, an experienced CPA can provide you with the tax audit help you need. A professional team of CPAs should be passionate about making sure that the result of your audit is fair, which may even include challenging the tax authority’s position if it’s necessary. A tax audit extension may also be needed.
Work with a single point of contact
Dealing with your finances can be stressful, but that stress is exacerbated if you have to communicate your needs to a new person every time you call into the office. When you call in to speak about your audit, you should be able to communicate with a single point of contact.
But, that doesn’t mean you shouldn’t enjoy the support of an experienced team. Two or three heads are always better than one, which is why your particular CPA should work together with the rest of the team to build a tax audit defense strategy that will ensure the most positive outcome possible.
Contact us if you’ve received a call from a tax auditor and we’ll help you navigate the messy area of tax law.
Tax audit FAQ
What is an audit?
An audit is an independent examination and verification of the accuracy of information presented in a person or organization’s financial statements. Audits are most often associated with the IRS, but internal audits are often conducted by businesses to get a clearer picture of its financial accounts and compliance.
What is the purpose of an audit?
An audit is a way to find out if financial statements are fairly and accurately presented. The IRS audits U.S. citizens if there is a discrepancy in a current or past tax filing.
What if I can’t assemble the right information within the requested timeframe?
Assembling the right information can be a challenge, so the IRS is able to grant reasonable extensions, depending on your particular situation. If you need a tax audit extension, speak with your CPA.
Who should I speak to about my audit?
Technically, you do not have to seek professional help when dealing with an audit. It is possible to do it on your own, but this is usually the case only if your audit is fairly straight forward. If you have any questions at all, or if you need any sort of advice or assistance, speak with a tax professional.
In some cases, you may need the help of an attorney, but first, ask your CPA if this is necessary.
If I do owe more money, will I also owe interest?
Unfortunately, if you don’t have the proper documentation, or if there really was an oversight on your part and you owe the IRS money, you will also be responsible for paying interest. Interest is calculated starting on the date payment of tax is due, which is usually the original due date on the tax return, not the date at the completion of the audit. Interest continues until the additional tax is paid in full.
What if I can’t make the payments?
It is important to be upfront and honest about whether or not you can make your payments, as the IRS will likely work with you to create a payment schedule that works for you. They also reserve the right to withhold your returns each year until the overdue amount is paid in full.
Is there any way I can prevent an audit in the first place?
Although many people believe that filing an extension increases their odds of being audited, this isn’t the case. As long as you file your return properly within the time frame provided to you, there’s nothing to worry about. However, you may be audited anyway. The IRS has increased the number of businesses it has audited over the last few years, and IRS employees are always combing over tax returns looking for discrepancies.
The main thing to understand is that an audit isn’t the end of the world, especially if you have help from a tax professional.