IRS Audits & What to do
The IRS is the agency that collects taxes for the federal government. They collect more than $2
billion every day. Taxes are required by law, and those who refuse to pay can face serious
repercussions like hefty fines or even jail time. To ensure compliance, the IRS conducts audits
and appeals on a regular basis with taxpayers across the country. In this blog post, we will
review some of these common actions from an overview perspective and how they may affect
you as a taxpayer. This blog post discusses what it means when someone gets audited by the IRS, how many
people get audited each year, different types of audits (examined tax return vs field audit), how
long it takes to complete an audit (between 8-10 weeks).
What are the odds of an IRS audit and what happens if you don’t respond
Anywhere from 0.5% to 2.5% of taxpayers get audited each year. Ignoring an IRS audit could
potentially result in an assessment of additional penalties, interest, and taxes. In addition, if you
continue to not respond, you may lose the right to bring your case to Tax Court, resulting in the
IRS beginning its collection process.
How to appeal a tax assessment
The IRS has many different types of appeals and often will send a letter in the mail, that outlines
the appeals process. You can also view the IRS’s webpage on Requesting an Appeal Here.
Before taking these steps, it may be wise to speak with an attorney, as each taxpayer’s situation
differs.
The process for filing an appeal with the IRS
Once you consider an appeal and decide that you are ready to move forward, you first request
an appeal by filing a written protest with the IRS. You should Mail this letter to the IRS and on
the letter, you must express your rights to appeal. The IRS advises NOT to send this letter
directly to the office of appeals to avoid delay. The IRS states that the Examination or Collection
office will consider your protest and make an attempt to resolve the dispute. If unresolved, your
case will then move to appeals.
The IRS website says that you can represent yourself, hire an attorney, CPA, or an “enrolled
agent authorized to practice before the IRS”
Taxpayer rights during an audit or appeal
First and foremost, a fair and impartial appeal is due to the taxpayer. You do have the right to
bring your case to court and seek legal counsel to represent you. In addition, you have a right to
professional and courteous treatment from the IRS, privacy protection in regards to your
financial matter, and a right to appeal.
Tips for preparing your case before submitting it to the IRS.
It’s important to seek professional counsel when dealing with the IRS. At times, the process can
be confusing and overwhelming. It’s also important to know all your rights and have someone
who is familiar with the IRS and how they operate take a look at your specific tax situation.
Congratulations on making it this far! Hopefully, you have a good understanding of the tax
process and what to expect if your taxes are being audited. If not, don’t worry; we’re here to
help. Our team is experienced in all aspects of business taxation and can provide expert advice
during any stage of the audit or appeal process. We’ve outlined some common mistakes that
people make when filing an appeal with the IRS so hopefully you can avoid these pitfalls as well
as our top tips for preparing your case before submitting it to them. Don’t let something like an
audit or assessment stand between you and success – contact us today for more information
about how we can help