IRS Tax Audit Representation

If you received a letter from the Internal Revenue Service (IRS), don’t panic. For most people, an IRS notice is among top nightmares. The IRS can be intimidating, and the stress caused by an audit is palpable. Taxpayers fear an assessment of more taxes and potential penalties for overlooking a mistake on their return.    Did you know? As an American taxpayer, you are entitled to legal representation from a tax audit representative. Having a tax or legal professional stand in on your behalf during an IRS income tax audit is known as tax audit representation.

Why did I receive an IRS audit?

An IRS audit is a formal review of financial information used to verify that taxes were reported accurately. Audits are not inherently sinister; the IRS just wants to double-check your numbers to ensure there were no discrepancies on your return. They are conducted in an effort to minimize the tax gap. That’s the difference between what the IRS is owed and what it actually receives. 

Random Selection and Computer Screening

In order to determine which taxpayers should be audited, the IRS utilizes both random selection and computer screening. You may be audited simply because your number has come up randomly. The odds of getting an IRS tax audit in 2019 were about 0.4%. 

IRS Audit Red Flags 

However, the IRS also utilizes statistics to establish a “normal” sample of tax returns, and will use these norms to look for any red flags in other tax returns to indicate that they should pursue an audit. Those red flags, known as IRS audit triggers, include: 

Math Errors

If you haven’t hired a professional to prepare your taxes, make sure you double and triple check your numbers. When filling out your tax return, don’t allow yourself to become distracted, forgetting to jot down that final zero.

Using Neat, Round Numbers

It’s likely that the numbers on your Form 1040 and supporting documents will not be in simple intervals. Avoid making estimations, but if you have to, round to the nearest dollar instead of the nearest hundred. Example: if you’re a photographer claiming a $465.25 lens as a business expense, round to $465 – not $500. The latter is unlikely and the IRS might ask for proof.

Reporting too Many Losses on a Schedule C

Those that are self-employed should resist the temptation to file personal expenses as business expenses. Too many reported losses might make the IRS wonder how your business is staying afloat. Reporting too many work expenses is along the same lines as reporting too many losses. Only deduct expenses that were absolutely essential to performing your work duties to avoid IRS skepticism. For the self-employed working from a home office, it might sound appealing to give yourself undeserved deductions for expenses that don’t technically qualify. The IRS knows these deductions are rife with fraud, so be sure to learn its actual definition before claiming it.

Claiming too Many Charitable Donations

Significant contributions to charity make you eligible for some well-deserved deductions. However, to escape the attention of the IRS, never report false donations. If you don’t have the proper documentation to prove its validity, don’t claim it.   If you told the truth on your tax return, you have nothing to worry about. However, if you either knowingly or accidentally lied to the government – considered, at times, a felony charge – you could face some serious consequences, and you should consider getting tax audit help and seek audit representation for your protection.

What to Do if I Get Audited

If you are selected for an IRS audit, it’s important to do exactly what the IRS requires, and do it promptly. Everything that is required of you will be outlined in your audit letter. In most cases, you’ll simply need to provide a few requested documents that backup your claims about your deductions or income. In some cases, you may also meet face-to-face with an IRS representative to answer questions and review documentation.    No matter what your audit is comprised of, it’s important to remember that you are legally entitled to tax audit representation. 

What is Tax Audit Representation?

Tax audit representation is a service provided by tax professionals in which they act as your representative in all audit dealings with the IRS. Each person who undergoes an audit from the IRS is allowed to have a tax advocate work on their behalf.   

What can an IRS tax representative do for me?

An audit representative can benefit taxpayers in many ways. An tax representative with the Power of Attorney can advocate to the IRS on your behalf. If they investigate your case and determine you do in fact owe the IRS money, they can help settle tax disputes in the following ways:  
  • Act as a direct line of communication
  • Identify which portion of your return is being audited
  • Gather necessary documents
  • Handle required paperwork
  • Defend and appeal audit, if applicable
  • Eliminate or negotiate the amount of proposed debt
  • Present an Offer in Compromise (OIC) or Installment Agreement
  • Protect your taxpayer rights
  • Save you money by ensuring you don’t pay more than you owe
  • Assist with IRS Notice CP22E

When do I need tax audit representation?

After you’ve received a notice, you should protect yourself with audit representation before IRS agents. In the case that you’re being audited by the IRS and have no receipts, consult a professional for advice on your next move. Oftentimes, the IRS imposes deadlines in which issues must be resolved to prevent incurring additional fines or audit penalties. If the IRS is ignoring your attempts to correct any mistake, it’s definitely time to hire an IRS audit representative; they can draft your letters in a more direct way that’s guaranteed to get the IRS’s attention to resolve your issues in a time-sensitive manner. Additionally, most IRS tax representatives have access to direct contact information for the necessary branches of the IRS where matters can be handled over the phone, effectively ending communication issues.    Remember that once the IRS begins an official investigation, any information you report could be potentially self-incriminating. A tax attorney will ensure you only divulge what they want to know – and nothing more. The faster you employ audit representation, the more quickly your case will be settled, and the sooner the IRS will be off your back.   It’s important to note that hiring professional tax audit representation is not an indication that you’ve done something wrong. An IRS audit representative can save you time and stress by handling the endless paperwork. They can also help you decipher the legal jargon, and ensure you don’t pay a penny more than you owe. Hiring tax audit representation signifies that you take the audit seriously; it will make the IRS agent’s job easier and lead to a better outcome.   Being under collections from the IRS can be dangerous and intimidating, and the wrong advice can be very costly. Avoid taking chances with your financial future and talk to one of Community Tax’s trusted professionals for audit representation. Act now by calling toll-free at (888) 684-5798, or chat live with one of our online representatives to see how we can help resolve your tax situation.