Handling IRS Audits & Appeals

IRS Audits and Appeals

Attorney Glen Frost is an active certified public accountant and a former forensic accountant. He will put his extensive experience to work for you if you are facing an audit. Our firm can handle your case from the initial notice to the final resolution.

Why Was I Audited? Why Was My Business Audited?

If you are wondering why your tax return became subject to an IRS audit, you should know that the IRS uses a few standard methods to choose which tax returns are given a closer look. These methods include:

  • Information matching: Employers and other entities that provide you with income send your W-2s and 1099s to the IRS. If the income reported on your return does not match the amounts reported on these tax forms, the return is likely to be audited.
  • Computer scoring: A computer program will score your return based on the likelihood that you have misreported income. IRS agents then pick the highest scoring returns and will analyze them to see if there needs to be a tax adjustment.
  • Abusive tax avoidance transactions and foreign accounts: If you are suspected of participating in or promoting tax avoidance, or if you have foreign bank accounts, you can expect greater scrutiny.
  • Related examinations: If your business partner or a similarly related party has been audited, there is a good chance that your return will be audited as well.

In addition to the above, returns may be selected for an audit due to local campaigns, such as compliance initiatives, or as the result of information provided by informants.

What Happens During an Audit?

You will receive a letter from the IRS notifying you that you are being audited. The audit will then take place either solely via mail, and you will send your substantiating records to the IRS agent assigned to your case, or will take place in person, and you or your representative will meet with the IRS agent. The better the records you keep, the smoother the audit will be. The purpose of the audit is to match your records with your tax return to prove the amounts on the return.

What Are My Rights During an Audit?

Although it sometimes may not feel that way, you do have rights when the IRS is investigating you. Some of these rights include:

  • The right to privacy and confidentiality about your tax matters
  • The right to know why the IRS is asking for information, how the IRS will use the information you provide, and what will happen if the information is not provided
  • The right to representation – you can choose to retain an attorney to speak with the IRS on your behalf
  • The right to appeal, both within the IRS and before the courts