What is an IRS Audit?
An IRS Audit is a review conducted by the Internal Revenue Service (IRS) to verify that the information reported on an individual or business’ tax return is accurate. A tax audit occurs when the IRS believes that there are discrepancies in your tax return, such as unreported income or overstated deductions.
When the IRS initiates a tax audit, you will receive an audit notice that outlines the issues under review and explains how the audit process will go forward. While being audited by the IRS is never an ideal situation, it’s important to know that you have rights and options, and there are steps you can take to navigate the process successfully.
Why You Should Take Audits Seriously
As a taxpayer, the thought of being audited by the IRS can be a daunting one. Audits can be time-consuming, overwhelming, and even scary. However, it’s essential to take these audits seriously.
One major reason to take audits seriously is the risk of unfavorable outcomes. Failure to prepare or provide accurate and complete information can result in additional taxes or even legal penalties. It’s imperative to ensure that all the necessary documents are in order and can be presented when requested by the IRS.
Moreover, the IRS may become suspicious if they can’t access needed documentation or if the taxpayer outright ignores audit requests. This could lead to further scrutiny and possibly even a more in-depth audit. It is much easier to avoid this situation by cooperating and taking the time to prepare fully.
It’s important to remember that the IRS auditing process is not a joke; the agency has the power to collect your taxes by force. So, it’s in your best interest to take the audit seriously. Even if you believe that the audit is not warranted, ignoring it could lead to serious legal trouble. And that’s something no one wants to get involved with.
If you find yourself in an audit situation, it’s often wise to seek the help of a tax professional. A qualified tax attorney can provide valuable insight during this critical period. They can guide you through the audit process, ensure that you are appropriately prepared, and help you avoid any legal pitfalls.
Know Your Legal Rights
Facing an IRS audit can be an unsettling experience. However, knowing your legal rights is an essential step in navigating this process successfully. As a taxpayer, you have the right to be informed, represented, and appeal an auditor’s decision.
One of the first legal rights you should know is the right to be informed. The IRS must inform you of why they are auditing your tax return, what the audit process entails, and what documents you need to submit. This information is essential because it helps you prepare the right paperwork, meet deadlines, and avoid further complications.
Next, you have the right to representation throughout the audit process. It is essential to understand that the auditor represents the IRS’s interests, not yours. Having a tax attorney on your side can help balance this situation, provide you with expert representation, and make sure that your legal rights are protected.
An experienced tax attorney can guide you through the audit process, help you gather documentation, and negotiate with the auditor on your behalf, which can significantly reduce your audit liability.
Confidentiality is another crucial legal right you have during an audit. The IRS must keep all your information confidential and must not disclose it to anyone without your consent. Having a tax attorney on your side can ensure that your personal financial information remains confidential.
Finally, you have the right to appeal the auditor’s decision. If you disagree with the auditor’s findings, you can appeal to the IRS’s Appeals Division. This division is an independent organization within the IRS designed to resolve tax disputes in a fair and impartial manner.
Consider Hiring a Professional Tax Advisor or Attorney
Navigating an IRS audit can be complex and challenging. However, hiring a tax attorney to represent you and understanding your legal rights can significantly ease the process.
That is why you should seek legal representation when dealing with an IRS audit, as it often leads to better outcomes and provides peace of mind. Want to know more about the IRS’ audit appeals process and how to navigate any legal issues in tax law? Schedule your consultation with one of our attorneys right now. We’ll determine what your IRS audit letter means and how we can fight it for you.