Awards & Recognition
Unfortunately, a federal tax audit can have harsh consequences for your business, your reputation, and your finances. Depending on how the audit was triggered and what your auditor discovers, potential outcomes include a substantial tax assessment, interest charges, IRS penalties, and in some cases, even a criminal referral and investigation. If you were chosen for an IRS tax audit in California, make sure you are prepared by hiring an aggressive and experienced dually licenses San Diego audit lawyer & CPA from the Tax Law Office of David W. Klasing to represent you.
For How Many Years Can the IRS Audit You?
Many taxpayers are under the impression that the Internal Revenue Service may not conduct an income tax audit if three or more years have passed since the return was due or filed. Unfortunately, this is only the partial truth. While the IRS generally has three years to conduct a tax audit, there are some exceptions where this deadline, called the “statute of limitations,” gives the IRS more time to audit you. For example, the IRS can audit you for up to six years – not three – if you failed to report a significant amount of your taxable income.
If you engaged in civil or criminal tax fraud – for instance, if you failed to file a return altogether – there is no limit on how long the IRS may audit you. That means tax violations that occurred years or even decades ago are, potentially, are still capable of landing you in legal trouble with the IRS and Department of Justice.
Why Did the IRS Choose Me for a Federal Tax Audit?
There are dozens of reasons the IRS may have selected you or your business for a federal income tax return audit. Certain “red flags” or audit triggers may, unfortunately, be beyond your control, such as which industry you are in or what vendors you have worked with in the past. IRS tax audit triggers include, but are not limited to:
- Being randomly selected by computer software
- Claiming large or numerous credits or deductions
- Omitting or forgetting to report certain sources of income
- Reporting a high or low level of income
- Underreporting the amount of income, you actually earned
- Transferring large amounts of money between accounts in the United States and other countries
What Happens During an IRS Tax Return Audit?
The answer to this question depends on what type of audit the IRS conducts. There are three possible federal audit types you could be selected for:
- If you are chosen for a correspondence audit, you do not need to meet with an auditor face-to-face. Instead, you will be required to submit documents for examination via mail.
- If you are chosen for a desk audit, you (or your representative) will go to an IRS field office, which are dispersed throughout California, to hold an in-person interview. These types of audits are generally more in-depth than correspondence audits.
- If you are chosen for a field audit, an IRS auditor (also called a “revenue agent”) will attempt to visit your home and/or business to collect records for examination and to interview you.
A correspondence, desk, or field audit can double as an “eggshell tax audit,” meaning there has been a major misstatement on the taxpayer’s return (such as significant underreporting of income), or as a “reverse eggshell audit,” which essentially disguises an IRS criminal investigation as a civil audit procedure.
Disputing the Outcome of an IRS Audit
You are not obliged to unquestioningly accept an IRS auditor’s findings. If you have sincere, fact or law-based reasoning for disagreeing with the assessed tax, penalties, and/or interest charges resulting from your examination, you may be able to successfully appeal, or challenge the audit’s results. Moreover, if you are dissatisfied with the result of your appeal, you may be able to advance the issue further by suing the IRS with help from our seasoned tax litigation attorneys.
To request IRS appeals, you must prepare a “written protest,” which must contain specific elements, such as copies of your IRS notices, and your fact- or law-based reasoning for disagreeing with the proposed assessment, interest, or penalties. Our San Diego IRS appeals lawyers can help you prepare a robust written protest that meets submission criteria and articulates your dispute clearly.
San Diego Federal Tax Return Audit Lawyers and CPAs
Our San Diego tax attorneys and CPAs work diligently to make the auditing process simpler, less stressful, and less costly for the taxpayer. Our founder and lead attorney, David W. Klasing, spent over 10 years as a public auditor in addition to his legal career, giving our tax team cutting-edge insights into audit procedures and IRS rules. This enables us to provide strategic, effective audit representation at all stages of the process, including appeals.
If you have been chosen for an audit in San Diego, we are here to help. To set up a reduced-rate consultation, contact us online, or call our San Diego tax office at (619) 780-2538. You can also reach the Tax Law Office of David W. Klasing by calling (800) 681-1295. Please note that all appointments at our San Diego location must be scheduled in advance.
Note: If you have concerns about the privacy of our initial or subsequent communication and are unable to easily travel to our Irvine / Orange County Main Office, consider scheduling a GoToMeeting to safely and securely establish an initial or maintain an existing attorney client relationship. 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. We are generally happy to travel to any of our appointment only satellite offices for a subsequent meeting in appropriate circumstances once a relationship is established via a signed engagement letter and the payment of an initial retainer or where enough retainer is available where a current client to cover the reasonable travel time and time required for the meeting.
Will it cost me more to hire the Tax Law Offices of David W. Klasing, who’s main office and the vast majority of the firm’s staff is located in Irvine California, but an appointment only Satellite office is close to my location, as opposed to a local company? Absolutely not! See our policies that address this issue here.
