You’ve been contacted by the IRS through letter or notice. While you hoped that the notice would state that the IRS had taken some action in your favor, your worst fears played out: the IRS is seeking additional information regarding a recent tax return. Of course facing an audit is not an enviable position, but it does not have to be a catastrophic situation. Taxpayers who precede meticulously and methodically can often avoid potential worst-case scenarios. Still, dealing with an IRS request for information or an audit can take significant amounts of time and effort.
If you’re facing an IRS audit, you may choose to handle the audit process alone. Then again, many taxpayers like to work with a Roseville tax lawyer who understands the process and the things for which the IRS is looking. If you’re facing a tax audit and have concerns about potential criminal conduct – also known as an eggshell audit – working with a tax lawyer is an extremely prudent step. The attorneys of the NewPoint Law Group, LLP can assist you with tax issues when there is a request for information or an audit. To schedule confidential legal consultation, call 800-358-0305 or contact us online today. In the meantime, following steps below can help you prepare and be ready to describe your issues when speaking to a tax lawyer.
Step 1: Determine What the IRS Is Investigating
The first step you should take is to read (and reread) the letter to understand exactly what the IRS is looking for in regards to your audit. In many cases, the IRS is only seeking specific information about one or two narrow issues. When this happens, it is wise to identify exactly what the IRS seeks and to supply only the exact information requested. Typically, any action of this nature will satisfy the IRS while avoiding an inadvertent and potentially unnecessary broadening of the audit. After all, if the IRS is only concerned with a narrow issue, why would you want to open up your entire tax return or multiple years of tax returns to scrutiny?
If you need assistance in determining exactly what the IRS letter you’ve received means, the IRS has created a letter and notice code to look up pages for both individual and business filers. Alternatively, a filer can click on the “view all” button on each page for a comprehensive listing and description of all IRS letters and notices. Individual filers should utilize the look-up tool for individual notices and letters. Business tax filers should make use of the corresponding business notices and letters look-up tool.
Step 2: Get Organized with Your Tax Filings and Financial Documents
After determining exactly what the IRS is looking for, the next step is to obtain the documents that are responsive to the IRS’s request. If the IRS has questions about the information entered on a tax return, such as deductions you claimed, it is likely you will need to locate supporting documentation for your claims. This many include receipts, mileage logs, credit card bills, doctors’ bills, and an array of other materials.
If your records are not in order, it may be wise to contact a tax lawyer. A tax lawyer can generally engage in a forensic reconstruction of your finances. This step is often necessary if the IRS disallows certain exemptions and deductions you claimed due to a lack of evidence–the materials to support those disallowed claims.
Step 3: Devise an Audit Strategy
Depending on the scope of the IRS’s requests, materials you are able to produce, underlying concerns, and other factors, you will need to develop a strategy that meets the IRS’s audit request. There’s no one-size-fits-all advice for an IRS audit. However, a general understanding of the techniques and processes is extremely useful when challenging an IRS audit. With a thorough understanding of the IRS audit technique manuals, an individual can often anticipate which course the audit will take, potential pitfalls, and items the auditor will direct particular scrutiny towards.
Work with Sacramento Tax Attorneys of NewPoint Law Group, LLP
Each Sacramento tax audit attorney at the NewPoint Law Group, LLP is proud to work with Californians living in and around Sacramento, Roseville, and Folsom. Our strategic and aggressive tax lawyers have helped several taxpayers through audits, and may be able to handle and guide you through the same process. Schedule a confidential consultation by calling 800-358-0305 or contacting us online.