Orange County Tax Audit Attorney

There are many different reasons you can be selected for an IRS audit.  Some selections are made because the IRS (Internal Revenue Service) notices errors or discrepancies in a taxpayer’s records.  Others are based on an association with someone who has already been selected, such as an investor or a business partner.  Others still have nothing to do with reporting inaccuracies, and are chosen entirely at random by a formula generation.

Whatever initially triggers an examination, one fact remains the same: audits have earned a fearsome reputation, and can become highly stressful, confusing, and complicated procedures.  The IRS is notorious for imposing some of the most stringent, comprehensive, and financially complex taxation rules in the world, and as a result, effectively navigating your way through an audit without experienced professional help can be a serious challenge.  Furthermore, if you disagree with the IRS’ findings and wish to appeal the results, you may eventually find yourself involved in tax court litigation.

If you have been chosen for an audit, you should know that you have a right to legal representation as part of the process.  As an experienced dual tax lawyer and CPA, David W. Klasing combines the aggressive client advocacy of an attorney with the financial acumen of an accountant, and will guide you through the entire examination process to both minimize your liability and bring you into compliance with state and federal law.  To arrange for a reduced-rate initial consultation with an Orange County tax audit attorney, call The Tax Law Offices of David W. Klasing at (800) 681-1295 today.

auditprocessUnderstanding the Audit Process

The prospect of facing an audit can be intimidating, but the more you know about what is to come, the more relaxed and prepared you will feel as the examination approaches.

First, you will receive official notification from the IRS, either through the mail or by telephone.  Audit notifications are not issued electronically, so if you receive an email alert, you should call the IRS immediately to report the message and clarify what, if anything, is expected of you.

The notification will include which documents the IRS wants to review, and will also supply a phone number and mailing address you can contact with any questions.  You should respond to the notification by the deadline supplied.  You cannot ignore an audit away, and by failing to respond in a timely matter, you merely expose yourself to the risk of wage garnishment, bank levies, and other drastic actions.

There are three main types of audits:

  • Correspondence — Takes place entirely through the mail.
  • Office — You go to your local IRS office.
  • Field — The IRS agent comes to you, either at your home, your business, or your accountant’s office.

The process itself varies in length, depending on variables like your examiner’s caseload, the severity of your tax issues, and time allowed for mailing, responses, and so forth.  When the review concludes, the IRS will send you its recommendations, with which you may either agree or disagree.  If you disagree, you have 30 days from the date of your notification to file a request for Appeals or an Appeals Mediation Program.  This is referred to as Letter 525, or the 30-day letter.

If correspondence with the Appeals Office fails to yield a satisfactory plan, you will receive what is called a 90-day letter, or Statutory Notice of Deficiency (Letter 531).  As the nickname suggests, you then have 90 days to address the Notice of Deficiency by petitioning U.S. Tax Court.

When an IRS Audit Becomes a Criminal InvestigationOrange County Tax Audit Attorney

Many times, audit findings can ultimately be resolved through a lump-sum payment or installment plan, and never involve criminal charges or necessitate prosecution.  However, there are instances in which an audit does uncover what appears to be a willful and deliberate violation of the law.  As the IRS states, “Criminal Investigations can be initiated from information obtained from within the IRS when a revenue agent (auditor)… detects possible fraud.”  One sign of a potential criminal investigation following an audit is the abrupt disappearance of your agent, which can be an indicator that he or she is preparing your case for referral to CID.

There are many different tax crimes you can be charged with, with some of the most common being tax fraud and tax evasion.  Criminal tax fraud, which entails deliberately lying about your financial records in order to artificially reduce or avoid your tax liabilities, is a very serious crime which can be penalized with hundreds of thousands of dollars in fines and years in prison.

Pursuant to 26 U.S. Code § 7201, “Any person who willfully attempts in any manner to evade or defeat any tax imposed by this title or the payment thereof shall, in addition to other penalties provided by law, be guilty of a felony and, upon conviction thereof, shall be fined not more than $100,000 ($500,000 in the case of a corporation), or imprisoned not more than 5 years, or both, together with the costs of prosecution.”

If you are facing an IRS tax audit, or are concerned that an examination could lead to a criminal investigation, it is absolutely critical that you address the matter immediately with the support and assistance of an experienced CPA and attorney.  To schedule a confidential initial consultation with an Orange County tax audit lawyer at a reduced rate, call The Tax Law Offices of David W. Klasing at (800) 681-1295, or contact us online today.