Effective audit representation saves money
Thursday, March 15th, 2012
The local IRS office has stepped up its audits on individuals and businesses. More and more people are coming to us for effective audit representation. Several of them had suffered costly outcomes after their initial meetings with auditors, and they came to us for help. We were able to improve upon their original assessment through effective management of the audit process.
In one case we finished recently, a business owner had relied on a seasonal tax preparer to prepare his tax returns. You know them, advertising like crazy until April 15, and then disappearing until next year. He paid extra for audit protection, which turned out to be useless. They do not represent their clients before the IRS, but merely advise them how to respond to an audit notice. Facing an IRS auditor without experienced help is asking for trouble and an inflated tax bill. This taxpayer learned the hard way that seasonal tax preparers are not equipped to deal with the IRS.
When the taxpayer missed the first deadline, the IRS disallowed all of his business deductions. This forced him to provide documentation for the entire business operation. He ran out of time and presented as much as he could gather to the auditor, who assessed tax and penalty based on the partial documentation. When he received the bill, he came to us in the nick of time. We were able to get the case pulled from the IRS legal department for reconsideration. Then we helped our client organize his documents, persuaded the auditor to agree to a plan for reviewing them that would be fair to our client, and provided immediate answers to the auditor’s questions during the examination process. As a result, we were able to save our client over $49,000 in tax, penalties, and interest, and keep his case out of Tax Court.
This is only one case among several in which taxpayers have suffered due to poorly prepared tax returns. If you find yourself in an IRS jam, we can help you. But we would rather help you prevent such disasters by helping you to conduct your business and record-keeping in a way that reduces your risk of having to face the IRS. Contact us today to find out how to reduce your audit exposure, or if you need help facing the IRS.