IRS Audits & Appeals During COVID-19 Pandemic

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IRS Audits & Appeals During COVID-19 Pandemic

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The Covid-19 pandemic has disrupted life and business activity around the world. The IRS has been no exception. Stay-at-home orders and social distancing requirements throughout the country have forced the agency to shut down nearly all its field offices and begin conducting its business remotely as much as possible. Unsurprisingly, it has led to major delays in IRS processes, including the audit and appeals process. At the Tax Law Offices of David W. Klasing, our experienced tax attorneys have been closely monitoring this situation and can help you navigate the IRS’s audit, appeals & litigation process during this unprecedented time.

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Are New Audits Being Started During Covid-19?

The IRS is generally not beginning any new audits while the pandemic is in its acute phase.  However, if the statute of limitations on an audit is expiring, or in certain other situations like where the audit is initiated by a taxpayer action, new audits may commence. Moreover, many states within the Union are ending their shelter in place orders and the IRS is recalling personnel as we speak.  Furthermore, while the IRS has stopped launching new audits, they are still allowing agents to work on new cases without opening an official examination. This means that they could be putting in a lot of the leg work now so that they are ready to start the audit as soon as practicable.

What If I Am Already in the Process of Being Audited?

Current audits will continue but without any in-person contact. This can present a series of issues related to communication and the exchange of requested documents. First, you may have already mailed requested records and documents to the IRS as you were requested to do. However, because no one is working at the facilities, this mail is piling up and no one is opening it.

While some auditors have transitioned to work from home, many still do not have this technology set up. Thus, you could be faced with a situation where you have no confirmation that your information has been received and cannot get in touch with your auditor. A skilled tax lawyer like those at the Tax Law Offices of David W. Klasing can work to find out who to contact, the status of your case, and what next steps you need to take.

To reduce issues with physical mail, the IRS has encouraged its auditors to begin using eFax and other security systems to send and receive documents. However, many IRS agents and taxpayers will not have access to the technology necessary to use these systems. As such, the IRS has relaxed its usual policy against the use of email during the pandemic. If a taxpayer wants to email an IRS employee a document, they can do so if they adhere to the following steps.

First, an IRS employee must authenticate the identity of the sender by phone, verbally confirm the email address, and advise the taxpayer that such communications are not secured. The taxpayer should also be advised to redact as much identifying information as possible. When submitting the documents, the taxpayer must state in the email or attached cover letter that “The attached [name of document] includes [name of taxpayer]’s valid signature and the taxpayer intends to transmit the attached document to the IRS.” IRS employees can also send certain documents by email to taxpayers, with the taxpayer’s permission.

Furthermore, effective March 30th until July 15th, the IRS will accept either photograph of signatures or e-signatures on certain documents. This includes any statement or form needing the signature of a taxpayer or representative traditionally collected by IRS personnel outside of standard filing procedures. It does not, however, include your actual tax returns. Before submitting documents by email or with an electronic signature, speak with your tax attorney for advice on whether it is proper.

Finally, some audit deadlines have been extended for both taxpayers and IRS auditors. Taxpayers now have until July 15, 2020, to perform “Specified Time-Sensitive Actions” such as submitting required books and records or filing a claim for a refund. Similarly, IRS agents will have an extra 30 days to perform all “Time Sensitive IRS Actions” such as assessing a tax or allowing a credit or refund to be applied. Consult with your tax attorney about whether any of these extensions apply to you.

What If I Am in the Middle of an Audit Appeal?

Appeals conferences are continuing at this time in a remote fashion, and taxpayers may not be permitted to request an extension until a face-to-face meeting is allowed. If you are in the middle of an appeals process and you did not already have an experienced tax attorney, now is the time to retain one. Your attorney can communicate with your auditor about the format of the tele-meeting and help you prepare. We can also make sure you are set up properly with the IRS’s video conferencing technology.

Call Our Experienced Tax Lawyers if You are Facing an Audit During the Shutdown

Just like much of the rest of society, the IRS has been forced to change its entire way of operating due to the global health crisis. The new rules and regulations can make an already-complex process even more complicated, especially without the help of a skilled tax attorney. At the Tax Law Offices of David W. Klasing, our lawyers have years of experience dealing with the IRS on behalf of our clients facing audits and navigating their cases to a successful resolution. To schedule a consultation, call us today at (800) 681-1295.

Regardless of your business needs, the professionals at the Tax Law Offices of David W. Klasing are here for you. We are open for business and our team will help ensure that your business is too. Contact the Law Offices of David W. Klasing today to discuss your business with one of our professionals.

In addition to our main office in Irvine,  the Tax Law Offices of David W. Klasing has unstaffed (conference room only) satellite offices in Los Angeles, San Bernardino, Santa Barbara, Panorama City, Oxnard, San Diego, Bakersfield, San Jose, San Francisco, Oakland, Carlsbad, and Sacramento. During the COVID-19 pandemic, our staff are working from home, but have full virtual meeting capability.

Our office technology allows clients to meet virtually via GoToMeeting. With end-to-end encryption, strong passwords, and top-rated reliability, no one is messing with your meeting. To schedule a reduced-rate initial consultation via GoToMeeting follow this link.   Call our office and request a GoToMeeting if you are an existing client.