Tax Audits
Tax audits can be overwhelming, stressful and intimidating. Sometimes, taxpayers may even choose to ignore the audit, thinking that the tax auditor will “go away” if they simply pay the assessment. Some people believe that hiring a tax audit attorney will make them look guilty. Both are incorrect.
First, the tax auditor will often view an audit acceptance as an indicator that there are greater problems and will audit other years or items on the tax return. Second, tax auditors often welcome a tax attorney’s assistance because it can make for a much smoother process. When approaching an audit, it is helpful to keep in mind that tax auditors just want to do the job correctly and as easily as possible. Additionally, the process routinely includes questioning by a tax examiner, collecting information from many time periods and sources and paying even higher tax liabilities. Some people may even face criminal indictment. For all these situations, it is much better to have an experienced tax audit attorney on your side.
Hone Maxwell LLP tax audit lawyers have experience working with various auditors and a host of unique tax audit circumstances. HMLLP attorneys know how to respond to IRS audit inquiries in ways that preserve the client’s rights. The team thinks creatively about justifications for the positions taken in tax filings and identifies documentation that will support the client’s position.
Many people try to represent themselves in tax audits, but going against specially trained tax auditors often leads to unfavorable outcomes and serious repercussions, including further investigation, greater liability and criminal charges. Experienced tax audit attorneys, compared to tax preparers, bring knowledge about the tax audit process. In tax audits, preparers are often put in the uncomfortable and dangerous position of defending their work.
HMLLP attorneys explain any tax issues that may arise and timely assert various tax audit defenses to help limit or prevent inappropriate audit assessments. The tax audit defense team has the necessary accounting and legal skills that are essential to navigate an effective audit.
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You should review the notice carefully and consult an IRS audit attorney before responding. The IRS may be requesting documents, explanations, or additional tax information, and your response can significantly impact the outcome of the audit.
Yes. An IRS audit attorney can communicate directly with the IRS, respond to audit inquiries, prepare supporting documentation, and represent your interests throughout the examination process.
IRS audits can be triggered by income discrepancies, unreported income, unusual deductions, business losses, foreign account reporting issues, cryptocurrency transactions, or other items that attract IRS scrutiny. Some audits are also selected randomly.
The length of an IRS audit depends on the complexity of the issues involved, the amount of documentation requested, and how quickly information is provided. Some audits conclude in a few months, while others can take significantly longer.
Yes. If you disagree with the IRS findings, you may have options to appeal the audit results or challenge the proposed assessment through administrative or judicial procedures.
Yes. The IRS frequently audits matters involving foreign bank accounts, FBAR filings, offshore assets, foreign income, foreign corporations, and other international tax compliance issues.
An IRS audit attorney can identify legal issues, develop effective strategies, protect privileged communications, and help prevent mistakes that could increase tax liability, penalties, or future enforcement actions.
Generally, no. Hiring an attorney is a prudent decision, and many times the IRS prefers to work with an attorney because it will make their job easier working with a tax professional who understands the process and what is needed.