IRS Audit Lawyer
Working To Minimize Your Liability In An IRS Tax Audit
If you have received a notice from the IRS regarding a pending audit, it is usually an indication that some type of discrepancy has been identified, and the IRS feels that a more thorough review of your financial records is in order. It is important that you have effective representation from an attorney with the ability to protect your interests.
At the Law Firm of Lance R. Drury, we work with clients who have been targeted for an IRS tax audit. A large portion of our practice involves defense representation after the audit, working to minimize your liability, and obtaining relief from excessive penalties. We typically work with your accountants behind the scenes prior to and during the audit so as to avoid any unnecessary red flags that may arise for the IRS by having an attorney involved during these stages.
What You Need To Know About IRS Tax Audits
Getting audited by the IRS is an intimidating prospect. However, it isn’t necessarily a problem at all. An audit is simply a process of reviewing your taxes to ensure that you are properly reporting your income and taxes. In other words, the IRS is double-checking that the numbers in your return add up and match with other data they have.
Audits can be the result of random selection. However, it is often due to some suspicious activity that is caught by less intensive checks. Nonetheless, being audited does not mean that you have done anything wrong. Even if you have a discrepancy in your return, it isn’t necessarily the result of ill intent. Of course, if you have some sort of dispute with the IRS, it is a good idea to get help from a lawyer. The right representation can help you to minimize both risk and your potential financial liability.
Discuss Your IRS Tax Audit Concerns With A Lawyer
Contact our office for honest answers and sound advice regarding your IRS tax audit. We offer a free initial consultation where you can learn more about your legal options and how we can help you. Contact us to schedule an appointment. You can also reach out by calling Ste. Genevieve, (573)-883-3056; St. Louis, (314)-260-6120; Nashville, (615)-733-8168; and San Antonio, (726)-202-1300.
Frequently Asked Questions
Why Does the IRS Audit Taxpayers?
The IRS audits taxpayers to minimize the “tax gap.” This is the difference between the amount of money that the IRS expects to receive from taxes and the actual amount it receives. Auditing serves this purpose in two ways. First, it double-checks the results of certain tax returns to ensure that they match expectations. Second, it deters people from being sloppy or attempting to be deceitful.
Tax returns are sometimes selected at random. However, they are more often selected based on some sort of suspicious element in return. These are some examples of why someone may be selected to be audited:
- Mathematical Mistakes: Sometimes, people just make calculation errors. If there is something that doesn’t quite add up (literally), then the IRS may audit your return. This is growing less common as more people prepare their returns digitally.
- Too Many Donations: Charitable donations are a great way to give back to the community. They are also an opportunity to save a little money on your taxes (though never more than the donation itself). However, if you have too many or suspicious donations, it may result in an audit.
- Overly Neat Numbers: Finances are rarely in totally round numbers. While you should round to the nearest dollar, you should not round any further. If everything on your tax returns ends in a zero or a five, that is a bad sign.
- Unreported Income: It is probably no surprise that not reporting income is a quick way to get audited. Of course, this may simply be an error of omission. Intentionally avoiding reporting income could land you in hot water quickly.
- Too Many Deductions: There are lots of deductions you can make on your taxes legitimately. However, if you have a lot of deductions, particularly relative to your total tax bill, the IRS may audit you. Home office deductions are particularly targeted due to a substantial amount of fraud.
What To Expect If You Get Audited
During an audit, the IRS will review your records and compare them with your tax return and other data that the government may have. For example, this may include income reported by an employer and other tax filings you have made. They may make requests for documents either in person or through the mail (the IRS will not call or email you about an audit). You can request an in-person interview if you prefer.
Exactly what happens during an audit and how long it lasts depends on the severity of your situation. If you have been honest and diligent, it should be relatively painless. However, sloppy mistakes or intentional fraud could come back to bite you.
How Bad Is an IRS Tax Audit?
IRS tax audits are not necessarily a reason to panic. However, they can also be a serious problem, especially if you have been a little too “creative” with your tax filings. Even if you have been perfect with your tax returns, dealing with an audit can be a bit of a hassle. It is good to get professional help, especially if you have a relatively high income or complex taxes. An IRS specialist can help you determine your next steps.
How To Handle an IRS Tax Audit if You Don’t Have Complete Records
Getting audited if you have incomplete records is not a very good situation. The IRS says that you should keep your tax records for at least three years. If there is no fraud involved (for example, if you simply made a mistake), the IRS cannot audit you beyond those three years. However, if there is fraud, you could still get audited at a later point.
If you have incomplete records and get audited, the IRS may pull information from other sources and be less likely to agree with your calculations. What happens depends greatly on the specifics of your situation. This is a good situation to work with a tax lawyer. They will be able to advise you on how to proceed.
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