the IRS...and Win!
IRS Revenue Agents - auditors, and Revenue Officers- collectors are
your adversary. They are from the government and they are not here to
First, if the IRS comes knocking at the door, do not let them in! Read Confronting
the IRS for initial help.
IRS audit can result in big tax increases, tax penalties such as
negligence penalties, late filing penalties and late payment penalties.
The Internal Revenue Service then adds on interest on the tax increase
and penalties! Big increases in tax dollars owed and even claims of
civil tax fraud are the potential result of a mishandled tax audit.
What are the steps in winning the audit:
- Engage a tax attorney,
in addition to your accountant or CPA to represent you during the audit
auditors, known as Internal Revenue Agents, and their criminal counter
part, CID (Criminal Investigation Division) agents have extensive
training and education. Without the assistance of a qualified tax
lawyer before the audit even starts, a taxpayer is starting behind the
- Defer all of the Auditor's
questions to your tax attorney and accountant. Many
of the Revenue Agent's questions are designed to trick you into
revealing unnecessary details that can cost you big dollars. Let your
tax lawyer protect you by filtering the questions and answers.
- Gather your accounting records
and all tax returns for the years being audited. If
your tax attorney can preview the business and accounting records in
advance of the audit, it is easier to formulate a successful challenge
of the IRS' audit.
After the Audit
Dealing with the IRS
If you are represented by a tax attorney, typically the Revenue Agent
will give a draft of the Audit Report to the Attorney for comment.
Negotiating with the examiner is the least expensive and quickest route
to resolving the matter. This is the opportunity to straighten out
factual issues. Unfortunately, the auditor's job is to increase your
taxes. Therefore the Revenue Agent has little discretion to decide more
complex issues in your favor.
Next, you will receive an Audit Determination Letter, which is also
known as the "30 day letter."
After you receive an audit report and proposed adjustments, your tax
attorney has 30 days to protest it within the IRS. A Protest Letter is
a factual and legal brief describing the errors made by the auditor.
The Protest Letter frames your entire argument. The matter is sent to
the IRS Appeals Office. At Appeals, they have the right to review the
facts, and compromise the case based upon the hazards of going to
court. Appeals Officers have more experience than auditors and
typically want to weigh the strengths of the taxpayer's arguments and
negotiate a deal to avoid court.
Internal Revenue Service Appeals Officers
frequently claim the IRS'
position is better than it is. If the case is Unagreed, you will
receive a "Notice of Deficiency" termed a "90 day letter."
Fighting Tax Matters in Court
You have 3 courts to fight
the IRS. The Notice of Deficiency is your "ticket" to the US Tax Court.
The Tax Court is the only court where you can fight your case without
first paying the tax.
The other choices are the US Court of Federal Claims and US District
Court. Both of these courts require payment of the taxes, interest and
penalties as well as filing a special Claim for Refund with the IRS.
Your tax lawyer can explain the advantages of each court.
Stopping IRS Collections
costliest mistake you can make is not immediately hiring an expert tax
attorney to protect you from the IRS.
Your tax attorney will stop the IRS
collection tricks and the constant
calls and pressure tactics. In addition, all of the skills and
techniques for protecting you and your assets will be applied for your
benefit. For more help stopping