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Tax Audit Defense

Audit protection that puts a shield between you and the IRS.

tax audit representation

Despite how often they’re predicted in media and pop culture, IRS audits are actually not that common. Only about half a percent of tax returns filed between 2010-2018 were selected for audit, and audit rates are at historic lows.

Full-blown field audits are relatively rare today, as most IRS account issues are brought up through automated compliance letters that can typically be resolved through mail or over the phone. But despite this rarity, you can still find yourself being selected for a field audit and considering audit defense services.

Table of Contents

What is Tax Audit Defense?

Tax audit defense refers to the professional practice of representing a client in a tax audit. The professional handles all correspondence with the IRS so that you don’t have to, and helps resolve your case to end the audit process as soon as possible and keep your contact with the agency limited.

Tax audit representation differs from tax resolution services in that the latter focuses on a variety of IRS and state tax issues, while IRS audit defense is a specific practice area for taxpayers who are already under audit and do not wish to represent themselves.

Do I Need Audit Defense?

Under the Taxpayer Bill of Rights, you have the right to representation to plead your case against the IRS and disagree with their findings in all tax matters (not just audits). You can represent yourself in your audit, seek out Legal Aid or a Low-Income Taxpayer Clinic if you cannot afford representation, or hire professional audit defense services.

Depending on what the crux of your tax audit is, you may be able to resolve the issue on your own if it is a relatively simple matter that can easily be disproved. For example, many married couples who divorce will accidentally claim the same child as a dependent. While this mistake is often cleared up through a correspondence audit, it could trigger a field audit if one of the parents has other tax issues that come up as red flags, or they are randomly selected.

If the reason for your field audit is more complicated and requires making a case to get the IRS to pull you out of audit status, you may want to seek professional IRS audit defense.

Is Representation Worth the Money?

Ultimately, it depends on how complex your audit is and your capacity to understand tax laws and IRS procedures.

Taxpayers who prepare their own tax returns may find that their software offers some kind of “tax audit protection” feature, but ultimately, you are the one who is responsible for everything that gets reported on your tax return. If you retained a professional to prepare your taxes, the tax professional is only responsible to the extent of what you tell them about your financial situation.

If you are comfortable with IRS correspondence and tax calculations, you may feel fine with handling your own audit. Many people find representation to be worth the money since it can be an incredibly stressful and time-consuming process, and assume that the IRS will take their defense more seriously if it is delivered by a tax professional who is knowledgeable in audit matters.

Consequences of a Tax Audit

If you are under audit, it can be a major source of stress and panic. All it means is that your records are under examination and that you need to produce additional documentation to defend your stance, such as proof that a trip you took was a bona fide business trip and not a vacation with some incidental business activity.

While being under audit does not instantly equate to property seizures or being assessed with a large tax bill immediately, they are still probable outcomes. The following consequences are also likely outcomes based on how your audit goes:

Prior tax years can be subject to audit, based on random selection or any significant changes that do not align with previous activity. Ultimately, the biggest consequence of a tax audit is the stress and time sink from handling this matter regardless of the financial outcome. However, most of the negative financial impacts resulting from an audit stem from needing to file missing returns or correct ones already on file, specifically if you need to hire a professional for these matters. If you are assessed a new balance, including interest and penalties, you need to make a payment plan if you cannot pay the amount due upon the auditor’s conclusion.

Representation

Professional audit defense services focus on bringing your account up to date and in proper compliance with tax laws. While they focus primarily on handling all of your IRS correspondence and helping you determine which records and facts would best comprise your defense, tax audit representation also gives you the surety that you are working with professionals who are familiar with IRS procedures and language.

While the IRS has a code of conduct they must adhere to when dealing with individual taxpayers, IRS agents are acutely aware that professional representation will hold them to a higher standard to comply with that code of conduct and have a high familiarity with administrative procedures.

Facing the IRS?

If you are facing an audit and are considering professional audit defense services, peace of mind is ultimately your greatest purchase. IRS audits are extremely time-consuming and entail searching for paperwork and other proof that helps substantiate tax benefits and statuses you are claiming. While they are an incredibly stressful prospect, audit defense professionals dedicate their careers to making your life easier and staying in touch with the IRS every step of the way. Contact us to discuss your audit defense options.