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Killer IRS™ Representative,
Joe Mastriano, CPA
8303 S.W. Freeway Ste 636, Houston, TX 77074
Phone 713 774 4467, Fax 713-774-4467,
Email support@taxproblem.org
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IRS Audit Advice
An IRS audit is when the IRS requests that you contact them to provide proof of deductions, income, or to consider the treatment of various items on your tax returns. Many people mistakenly think that all they need to do is to bring their receipts and other information to the revenue agent as verification. What they don't realize is that the IRS audit person is trained to ask probing questions, and to come up with reasons why your deductions are not acceptable. In fact, the professional community has complained that in an IRS audit they often do not distinguish between the questions asked in a general audit vs. a criminal investigation. You will be asked financial status questions focusing on your lifestyle, standard of living, and other elements unrelated to the items on your tax return. This is one reason why even if you have receipts, and feel that your return was prepared correctly, you could still be in jeopardy. The tax code is written in a manner that leaves a lot open to interpretation. You must meet 'purpose' tests, and other tests that even many accountants take for granted. I have personally experienced an IRS audit person denying deductions for my clients when I felt we had enough evidence to justify our position! So basically, any time the IRS requires you to prove something to them, you need the help of an experienced professional who knows what the law is and how to argue your position. The ability to represent your position and at the same time maintain a good rapport with an IRS audit person is essential. Otherwise the IRS audit person can and will make adjustments against you.
Audit Representation Before The IRS
Audits are selected based on IRS programs. One program looks for compliance and another tries to find errors. They have not examined your return yet. Are you afraid? These days, auditors tend to be nicer. They tend to be more educated than the collection officers. They do not want to send your case to the criminal division unless they have to. I have represented people who have taken phony deductions, and have left out income on their tax returns. During my career I have never had an auditor accuse my client of criminal fraud. In each case they were happy to make the adjustments and charge the taxpayer additional tax, interest and penalties.
Of course, you have to say things like....I forgot, or I guess I make an error, or I can't find the proof for the deduction. You can't say, "Oh yeah, my friend the accountant said I should put down a lot of expenses because there is less than 1% chance of being audited". There may actually be a less than 1% chance of being audited in your case, but you have to be careful not to say you 'willfully' did anything you know was wrong in the preparation of the tax return. Got it? To this day I don't know of anyone foolish enough to admit to 'willfulness'. If you follow this manual, you will have very little to fear, unless of course you can't document the items on your return and don't want to deal with the increased tax liability.
There are two main types of audits. Correspondence and face to face. If any of these produces a tax liability, then the IRS sends you an examination report. You have 30 days to appeal it. In a face to face audit, the letter will ask you to provide information to back up certain items on your return. You may have to prepare two sets of proof. One directly responding to the letter, and another proving all the other items on your return.
I have represented people in audits from other states without any problems. It is not necessary, or better, for the tax payer to sit face to face with an auditor to prove your income and expenses. You should not let the auditor into your home or office to conduct the audit. As a representative, I have yet to have the IRS refuse to have me send the information by mail when I have an out of town client. Locally, I don't mind appearing with my client. We have a pretty decent audit group here in Houston.
Do you still feel that you are up to representing yourself in an audit? Call or email us before it's too late.
Solution...
Obtain a free consultation with an experienced professional that does a lot of IRS audit representation. The goal of an experienced professional is to assess your exposure, which is how much money you can potentially lose. You can then discuss what it will cost to be represented. If the costs are reasonable in relation to the potential tax that can be charged to you, obtain the representation (assuming of course that you are satisfied with that person's knowledge, personality, and experience). If you are willing to risk additional assessment, represent yourself. Do not try to bargain down the fees. You cannot predict exactly how much time it will take someone to represent you. Either do it yourself or pay for experienced IRS audit help.
- If you are considering hiring us, call Joe Mastriano, CPA 713-774-4467.
- Think your IRS matter is handled? Think again!
- For your free analysis, Click Here to email me.
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