IRS Audit and Examination Defense

Audit Defense

An audit can be one of the most uncomfortable and frightening experiences with the IRS. There are many different kinds of audits, some more intimidating than others. Whatever you are facing, an experienced tax attorney can ensure that the tax law is applied correctly and fairly.

Automated Under-Reporting Unit

The most common audit that is done by the IRS is actually not much of an audit at all, it’s more of an adjustment. These adjustments are done by the Automated Under-Reporting Unit (AUR).

Each year your income information is reported to the government in the form of W-2’s, 1099’s, mortgage interest statements, bank interest statements, etc. All of these documents are compiled by the IRS and can be accessed through their “Wage and Income Transcripts”.

These transcripts show everything that was reported to you for the year.

The AUR Unit will simply compare what was reported to you with what was reported on your tax return. If they find a discrepancy, they will automatically send you a letter proposing to adjust your return.

If you agree with the adjustment you can simply sign the notice (or ignore it) and the IRS will make the adjustment and send you a bill. If, however, you do not agree with the adjustment you will need to prove to them why their adjustment is in error by responding to the notice.

Correspondence Audit

The second type of audit is a correspondence audit. Correspondence audits are growing in popularity because the IRS is able to conduct these audits with fewer resources, allowing them to work more efficiently.

A correspondence audit simply means that they are conducting the audit through the mail — they do not require you to actually come into the office to meet with them.

A correspondece audit generally begins with a letter that details what the IRS is auditing. For example, it may say that they are auditing your medical expenses and ask you to send in all of your medical receipts.

If you have all of your receipts and can easily prove whatever you claimed, this may turn out to be something that you can handle fairly simply by yourself.

If your situation is more complicated, or you have lost your records, you will probably benefit from an Attorney who is familiar with the law surrounding such issues and can advocate why you should still be allowed the deduction, even without receipts.

Field Audit

A field audit is what people generally think about when they hear about an IRS Audit. It involves going into an IRS office (or the IRS coming to your home or office) and spending a day or two going through all of your records.

Field audits are the least common audit method used by the IRS, but they are also the most time consuming, detailed, and methodical audit that you can undergo.

I generally recommend that anyone who is going through a field audit should seek professional representation to ensure that your rights are protected and the law is applied correctly.

Take the Next Step

Whatever your tax needs are big or small I invite you to call me at (303) 376-6267, complete the “Contact Me” form below, or email me at john@cotaxattorney.com