irs-audit-letter

One Client’s Worst Nightmare: Being Audited by the IRS

When Tara walked out to her mailbox and saw the heavy envelope from the IRS with the handwritten address, she had a bad feeling before she even opened it.

“I broke out in a cold sweat,” she says.

Inside, amidst 15 pages of documents and forms, Tara discovered she’d been selected for an audit  – for her last two years of taxes.

Ask people what their worst nightmare is, and many will describe a scenario just like this one. Small business owners are especially vulnerable, because they often have much more complicated tax situations than W-2 employees, yet many still do their taxes themselves. For those who aren’t tax professionals, it’s easy to make a mistake that could lead to an audit.

When Tara got this envelope, she was definitely alarmed, but she wasn’t exactly surprised. She’d recently opened her own small business, an LLC, and for the past two years, she’d been doing her taxes herself using the free online version of TurboTax.

Tara wasn’t going to make that mistake again. She went into action immediately, searching online for tax professionals who could help her through an audit. Most of the listings she found guaranteed that she wouldn’t have to pay anything to the IRS, but they charged a hefty flat fee. This made Tara nervous.

“Anyone who guarantees anything is very suspicious to me,” she says. Worst-case scenario, she’d wind up paying back taxes and penalties plus that hefty up-front fee.

Finally, she found the Law Offices of Alyssa Whatley.

Tara noticed that Alyssa Whatley was a tax attorney who specialized in working with people just like her. She liked the fact that her website didn’t try the hard sell or make any guarantees. And when she gave Alyssa a call, she was even further impressed.

“I was very surprised,” Tara says. “She spent close to an hour on the phone just talking about the next steps I needed to take, and how the process works. I thought her fee was extremely reasonable considering it was for both years, and also covered me for the first appeal.”

So Tara made an appointment for an in-person conversation about her taxes. “I felt really comfortable talking to her,” she says.

Alyssa spotted the problem immediately. Tara had listed her expenses on the incorrect schedule, which was what had triggered the audit. To make matters worse, she’d deducted some things that weren’t deductible, which had caused the IRS to deny all her deductions and expenses for the past two years.

Alyssa asked Tara to gather all her bank statements and receipts, so Alyssa could comb through her expenses and determine what was and wasn’t deductible for Tara’s business. She also referred Tara to a CPA who went through her tax returns and listed

everything on the proper schedules – essentially correcting the record for the past two years.

Alyssa knew that the more organized the documentation was, the stronger Tara’s chances of getting a good result. So she was careful about presentation when preparing the files to show the IRS auditor. “Alyssa created a beautiful portfolio in date sequence order that categorized all my deductions,” Tara says.

A 50% Reduction in Tax Liability

Alyssa provided the auditor with meticulous documentation, but even so, a good portion of Tara’s expenses were denied. Alyssa had a feeling this was because the auditor simply didn’t understand how Tara’s business worked, or the need for those expenses. So she filed an appeal.

To prepare, Alyssa asked for a sample of Tara’s product. She brought it to the meeting with the appeals officer, and spent a lot of time explaining how Tara’s business worked and why certain expenses were necessary.

In the end, Alyssa was able to reduce Tara’s tax liability by 50%, saving her approximately $16,187. She also negotiated down the penalties and interest.

“She always stayed positive, always stayed within the law, and never guaranteed anything. She was up front about what was possible,” Tara says. “She kept my expectations realistic, and got me a result that was much better than I thought it could be.”

Now Tara has settled with the IRS, and recently sent her first check. She’s optimistic for the future, especially since people who are audited once almost never have to go through it again.

“I don’t feel like I could have gotten to where I am now without Alyssa,” Tara says. “I’m very happy with the results and would recommend her 200%.”

Have You Receive an Audit Letter from the IRS?

If you’ve been selected for an audit, you don’t need to deal with it alone. Schedule your free, confidential one hour meeting like Tara did.

From left to right, Alyssa Maloof Whatley, Harrison Kulp, and Kiara Maxie

Alyssa Maloof Whaltey

My goal is to make the tax resolution process as easy and stress free as possible so you can get back to focusing on the things that bring you joy.

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