Irvine IRS Tax Audit Attorney

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The IRS (Internal Revenue Service) conducts over one million audits every year.  While some people and businesses are at an elevated risk of being selected due to variables such as industry and income level, any individual or company can be chosen.  Some selections are generated entirely at random, while others are triggered by discrepancies on financial records which may be indicative of tax abuse and criminal behavior. Large corporations are particularly susceptible to selection, as are entities which have ties to taxpayers who were also selected.

While the reasons behind IRS examinations vary, the bottom line does not: all tax audits need to be taken seriously and addressed in a timely manner.  While most audits are resolved without necessitating prosecution, your auditor may determine you have committed fraud or tax evasion — serious crimes which can trigger debilitating fines and even months or years of prison time.  Even if you feel you were chosen at random and your records are perfectly accurate, persistent failure to respond to the IRS can result in wage garnishment, bank account levies, property seizures, and other costly and unpleasant collection actions.

If you have been selected for an audit in Irvine, and particularly if you are concerned about the possibility of a criminal investigation, it can be highly beneficial to approach the examination with the guidance of an accountant and lawyer.  David W. Klasing has more than 20 years of experience, and combines dual legal and financial strengths as both a tax attorney and CPA to help his clients reduce their tax liabilities, come into compliance with the law, and aggressively fight any tax crime allegations.  To schedule a reduced-rate initial consultation with an Irvine IRS tax audit attorney, call The Tax Law Offices of David W. Klasing at (800) 681-1295 today.

How to Prepare Yourself for an IRS Audit

The IRS will notify you that you have been chosen for an audit by either mail or phone.  It is very important to note that if you receive an electronic notification, you should contact the IRS immediately to let them know.  The IRS does not issue email notifications regarding audit selection, so if you do receive an email, you have likely been targeted by a phishing scam.

Assuming you receive a legitimate notification, you should respond promptly to avoid subjecting yourself to the penalties noted earlier, such as levies and seizures.  If you receive a letter, it will contain an address or phone number you can contact with any questions or concerns about the process ahead.

When you know an audit is coming, you should take a few basic steps to prepare:

• Contact an attorney-CPA who is able to function as both an accountant and a legal advocate.
• Locate and assemble all the documentation the auditor wants to examine, and review your documentation with the guidance of your representative.  Send photocopies, not original documents.  If you cannot find the records the IRS wishes to examine, request copies immediately.
• Familiarize yourself with your rights as a taxpayer, including your right to legal representation, to fair and courteous treatment from your auditor, and to know why you were chosen and what the IRS plans to do with the information you provide.

How Does the Audit Process Work?

When you receive notice from the IRS, you should reply by the deadline specified on the materials you receive. There are three types of audits you may be chosen for:

• Correspondence — This means the examination is conducted wholly via mail. If the sheer volume of documentation involved renders this method inefficient, you can request an in-person audit instead.
• Field — This means the auditor will come to you, either at your home, your place of business, or your accountant’s office. Note you may certainly request a location transfer, but the granting of that request is not guaranteed.
• Office — This means you must travel to your local IRS office to meet your auditor.

As for the examination itself, the timeline varies from one case to the next depending on factors such as:

• How long it takes for physical documentation to be mailed.
• How many other cases your auditor is reviewing.
• How severe and complex your bookkeeping issues are, if any are found to exist at all.

When the examination is over, you will receive notification containing the IRS’ findings and recommendations. There are three ways an audit can end:

• No Change — Your records were accurate, and no changes are necessary.  Everything has been substantiated by your documentation.
• Agree —  You accept the auditor’s proposed changes and agree to pay whatever the IRS determines you owe, either in a lump sum or through gradual installments.  You may qualify to pay less than you owe, but you will have to apply for an Offer in Compromise by submitting Form 656.
• Disagree — You do not sign off on the agreement letter.  Instead, you can:
  • Request a phone conference with an examiner, which may lead to requesting:
    • A conference with a manager.
    • Appeals (or an Appeals Mediation Program).

If neither conferences nor the Appeals process resolves the issue, you may petition U.S. Tax Court within 90 days of receiving your Notice of Deficiency, also known as the 90-day letter or Letter 531.

If you have been chosen for auditing in Irvine, or if you have concerns about an examination leading to a criminal investigation and possible prosecution, you should contact an experienced Irvine IRS tax audit attorney immediately.  Call The Tax Law Offices of David W. Klasing at (949) 681-3502 or (800) 681-1295 today to arrange for a reduced-rate initial consultation.