How to avoid negative consequences from an IRS interview
March 20, 2014
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Have to agree to interview by taxing authority directly?

An audit notice is one of the most feared letters any citizen can receive in the mail. If there’s one thing that scares the average American, it’s the specter of having to submit to an audit. Equally scary is the thought of having to submit to an in-person interview by a taxing authority.

Interviews are used by the taxing authorities to gather information about a taxpayer’s financial history, standard of living, typical business operations, revenue and expense recognition principles and other pertinent accounting policies, to determine the accuracy of the taxpayer’s books and records and to reach informed judgments about the likelihood of misstatements contained within the taxpayer’s returns.

The IRS uses information gleamed from interviews to develop leads as to other areas of potential misstatement and to establish evidence to be presented in subsequent litigation should it become necessary. The testimony of employees, other witnesses and the confessions or admissions of alleged tax violators are relevant to preparing for subsequent litigation. The government’s as well as the taxpayer’s position is presented to a jury through the testimony of witnesses.

Oral testimony often elicits information that would not otherwise be gleamed from the physical documentation provided to the auditor. Moreover, it has been said that 70% percent of communication is non-verbal. I often counsel my clients to be very cognizant of their body language during an audit to make sure their words and body language are in agreement. Most auditors want to watch the taxpayer closely as they question them.

The taxing authorities have the ability to subpoena you to force you to submit to an in-person interview. I do an excellent job of prepping my clients for any such interview and believe that ordinarily it is advantages to have a client present during an interview because it is nearly impossible to get my self in the position where I can satisfactorily answer every question posed by an auditor.

Contact my office to schedule your reduced rate initial consultation to learn how I can assist with your individual tax law concerns.