The IRS has the power to seize properties and other valuable assets. That’s why whenever a businessman or entrepreneur receives a letter from the IRS for an audit, he or she panics. If the IRS auditor finds any discrepancy during your audit, the IRS can charge you with hefty penalties instantly.
Therefore, to prepare yourself for an IRS audit, it’s better to hand over these sensitive legal matters to professional tax accountants. The IRS allows you to present others on your behalf during audits. These professionals can use their experience and knowledge to properly assist you and represent you during an IRS audit.
We have brought you a comprehensive guide to IRS tax audit representation. You can make your audits smooth and stress-free with proper knowledge.
What Is Tax Audit Representation?
Tax Audit Representation is a service in which a tax specialist, such as a CPA, a tax attorney, or an enrolled agent, represents you in IRS audits. Under the “Taxpayer Bill of Rights,” a taxpayer has the right to introduce others to represent the taxpayer during tax audits. The reason for this form of relief is that most people are unfamiliar with accounting rules and procedures or IRS laws and regulations. As a result of this exemption, taxpayers can bring professionals to audits on their own behalf.
Professional tax audit representatives are attorneys or accountants who are licensed and competent to communicate with IRS personnel during audits. They can also better explain and present your finances to the IRS, ensuring that no mistakes are made. Hence, they can do the following things during an audit:
- Attend any IRS audit sessions in person or over the telephone.
- Assist you during any IRS interviews.
- Prepare any papers that may be required during the audit.
- Manage discussions with the IRS representative.
- File your appeal if you disagree with the conclusions of your audit.
Furthermore, the IRS offers various tax incentives to taxpayers, which are often missed or ignored by many taxpayers due to impulsiveness. These professionals can examine your finances and documents completely and aid you in discovering applicable tax deductions.
Why You Need IRS Audit Representation
Taxpayers may hire an IRS audit representative due to the following reasons:
- They don’t want to face IRS agents in person.
- They don’t have copies of the documents that the IRS demands during the audit.
- They have no background knowledge of taxes.
- Taxpayers have claimed too many charitable contributions or deductions.
- They are busy with other office matters.
However, hiring a representative may not be necessary every time you face an audit. For example, in the case of an audit by mail only, you might feel confident enough to face an audit via mail on your own. There are also taxpayers who have all the IRS requested documents on hand and they are confident, so they don’t need any help on their audits.
Benefits Of Tax Audit Representation
Managing An Audit Representation before the IRS can help you to get the following benefits:
1. Organize Your Tax Documents
The tax professionals can properly arrange your documents. Professionals can find and correct any mistake in your recordkeeping. Additionally, if there are any missing tax deductions, they can also point to these and help you lower your taxes.
2. Better Communication With IRS
Tax professionals are experienced and confident because of their experience and knowledge. They don’t panic in front of the IRS agents. That’s why these professionals can communicate with the IRS agent confidently. They present your answers to the IRS in a comprehensive way which helps your efforts to try to clear your audits without fines and penalties.
3. Save Your Legal Rights
IRS agents during IRS tax audits can sometimes be harsh and sometimes confuse you. When you have a tax professional by your side, they can assist you by pointing out any violations of your legal rights. If you are not satisfied with the IRS audit, then these representatives can also file an appeal for an audit amendment or a new audit.
The tax attorneys are familiar with the 1,700 pages of the IRS tax code. That’s why having these experts by your side can save you from any difficult situations that may arise during an audit.
4. Reduce Errors
During the audit process, taxpayers may be required to file missing tax returns. If they are not professionally prepared, this submission of tax returns may contain errors. As we all know, any error in a submitted tax return may result in significant fines. However, the audit representative saves you from such consequences by filing the right tax forms.
5. Get Your Desired Audit Results
The major benefit of tax representatives is that they use their experience and knowledge to save you from hefty penalties and fines which the IRS can charge during audits. Moreover, they can help you with your back taxes by negotiating with IRS agents by, for example, demonstrating that you do not have the ability to pay anything toward your back taxes due to your Currently Non-Collectible (CNC) status. Or, if at the conclusion of the audit it is determined that you owe a large amount of additional tax, with their intuitive reasoning, they could possibly convince IRS agents to set up an installment payment plan to enable you to pay off the tax balance through the smallest possible monthly payments.
How To Find The Best Tax Audit Representative?
There are many tax audit services that claim to be professional and experienced. However, many of them are fraudulent and can do more harm than good resulting in you possibly owing more in tax, penalties, and interest than if you had represented yourself during the IRS audit. That’s why you need to look for the following features when selecting a representative for your IRS audit:
- Check the credentials of any alleged tax experts.
- If the tax experts are legitimate and know what they are doing, they must ask you for a long trail of paper including your finance documents, bookkeeping records, and other financial documents.
- They don’t make false promises of 100% success of tax exemptions.
- They ensure to stay with you from start to finish of your audit and file any missing tax returns and if appropriate file an appeal.
- They should provide you with a secure platform to enable you to safely share your confidential information.
- They shouldn’t ask for fees before the audit process.
- A reliable representative can assess your case and provide you with free advice.
If the IRS has selected you for an audit, you should contact Tax Relief Company. These tax audit specialists may make your audit procedure less stressful. You may stay in your office and concentrate on other important aspects of your business while these tax audit services complete your tax audit with the IRS effectively.