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IRS Audits
IRS Audits quite often end up bad for taxpayers costing them thousands of dollars in additional tax and penalty. However, IRS Audits do not have to end up bad for taxpayers if they defend the audit correctly. The best way to defend an IRS Audit and win is to contact a tax professional to represent you at the IRS Audit.
Taxpayers who get audited by the IRS need to understand several things about the IRS. First, the mission of the IRS is to collect tax for the United States Treasury. Second, the IRS uses the IRS Audit system to create additional taxes. Third, an IRS Audit is not a jury of your peers. An IRS Audit is a jury by an IRS Auditor. Therefore, proper representation is critically mandatory for defending an IRS Audit.
The percentage of tax returns that get audited by the IRS is low when compared to the number of tax returns that the IRS receives from taxpayers. The IRS audits taxpayers through correspondence audits, field audits and desk audits. A correspondence audit is an IRS Audit where the IRS changes an item or items on a taxpayer’s tax return and then sends them a notice of the changes in the mail through an IRS Letter. A field audit is an IRS Audit that happens in the field and the field in this regard is a taxpayers home or business. A desk audit is an IRS Audit where the taxpayer goes to the desk of an IRS Auditor at an IRS building. A taxpayer can not let the IRS come out to their home or business to conduct an audit. An IRS Auditor has eyes and is trained to use them. Thus, when an IRS Auditor goes out to a home or place of business, they use their trained eyes to look around at all the stuff a taxpayer has which leaves the IRS Auditor to wonder how a taxpayer can afford all their things…it must be through cheating on taxes.. A taxpayer can not let an IRS Auditor have such a moment by letting the IRS Auditor to come out to their home or place of business.
An IRS Auditor has a triggering impulse to not allow certain legitimate items to remain on a tax return. This is called a disallowance. Despite the mounds of evidence (like receipts and documentation) that might be stacked in front of them at an audit, the IRS Auditor frequently disallows taxpayers the right to include items on a tax return that may give the taxpayer a tax advantage. The taxpayer must fight to keep legitimate items on their tax return. The IRS is stubborn in this area. An experienced Tax Professional knows how to break this IRS stubbornness by way of the tax code.
Likewise, an IRS Auditor has a triggering impulse to also access penalties after an IRS Audit. The IRS Auditor has wide discretion to access penalties on top of the tax that a taxpayer may be found to owe. The IRS Auditor can access penalties for honest mathematical or calculation errors that a taxpayer may have made on their tax return. The IRS Auditor can also access penalties for willful misstatement of items on a tax return, like taking a deduction that a taxpayer knows they weren’t really entitled to take but tries to bundle it on their tax return. An IRS Auditor can access penalties for fraud when they think the taxpayer was intentionally trying to take items on their tax return that they knew were fraudulent. The unfortunate thing is that the IRS Auditor gets to determine a taxpayer’s intent and then access a penalty based on the presumed intent. An experienced Tax Professional knows how to reduce the severity of penalties that the IRS Auditor can access by way of the tax code.
Much can go wrong for a taxpayer in an IRS Audit. Therefore, it is important to obtain IRS Representation when audited by the IRS. Contact a Tax Consultant for an analysis of your tax audit.
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