Articles Posted in Audit Representation

So, you’ve just received a letter from the IRS informing you that you are being audited.  Stay calm, and don’t panic!  IRS audits aren’t as bad as you might think.  That is, if your’re properly prepared and ready for the challenge that awaits you.  An important consideration will be the decision of whether or not to retain counsel for representation in the audit.

Why Me?

The Internal Revenue Service utilizes several examination techniques to determine the accuracy of tax returns.  Computers are utilized to verify computations shown on each return.  If it is determined that the computations are incorrect on a return, a notice is issued to the Taxpayer adjusting the amount of taxes on the return.  Correspondence audits are initiated by the issuance of letters to the Taxpayer requiring verification of deductions and/or examinations shown on a return.  Office audits are conducted in local Internal Revenue Service offices.  Field examinations are conducted by Revenue Agents of more complex returns.

Correspondence Audits

The use of correspondence audits by the IRS has increased substantially over the past ten years.  Correspondence audits are used by the IRS to obtain additional information from the Taxpayer about a few limited issues on a return.  The correspondence audit is most often focused on narrower issues than a traditional office audit and is conducted by mail or other written communications, making them less expensive for the IRS.  Some examples of the kinds of items that can which can be verified by a correspondence audit are itemized deductions such as interest, taxes, charitable contributions, medical expenses, and simple miscellaneous deductions.  Issues other than itemized deductions may be examined if they are a single matter which would not be appropriate for an office audit or field examination.

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