IRS Audits
The IRS issues a high number of tax audits every year; some IRS audits are randomly selected, and some IRS audits are issued base on a numerical scoring system the IRS uses.
There are five main kinds of IRS audits:
1. Correspondence Audit – This is a letter from the IRS Service Center requesting that you document an item on your return by a specified date (make a copy, don’t ever send your only original). This type of audit is reserved for small, simple tax returns and most likely your business will not be audited in this manner.
2. Office Audit – The IRS may ask you to report to a nearby IRS office and document one or more items on your return. Office IRS audits are generally very simple unless discrepancies or errors prompt the IRS to dig deeper into your tax return. If your business is a small, sole proprietorship with sales under $500,000, you may receive this type of audit.
3. Field Audit – An IRS agent will ask to meet with you in person for a thorough review of your records. You are allowed to decide when and where to schedule the IRS audit’s meeting. Choose a neutral location — preferably in the office of your IRS lawyer or tax lawyer, since they probably know more about tax laws than you do, and they can provide the best possible assistance.
4. TCMP Audit – A TCMP (Taxpayer Compliance Measurement Program) audit is to update the data used to write the IRS’ numerical scoring program. It involves a total audit in which every part of the return must be substantiated by documentation. These IRS audits are randomly chosen, and anyone can face them regardless of how carefully they prepare their tax returns.
5. Criminal Investigation Audit – The IRS will conduct a criminal investigation audit if they suspect you of tax evasion. If they prove that you have purposefully not paid your income taxes, you can face substantial fines and even jail time. Obviously, you should hire a lawyer for tax audit help if you face this type of audit.
Just because you receive an IRS audit letter it doesn’t automatically mean you are going to owe more money or face penalties. But in general, the IRS has a “guilty until proven innocent” state of mind, so your best course of action is to hire IRS audit representation.
Winning IRS audits can be an uphill battle; it’s up to you to prove to the IRS that they are the ones who made a mistake. A tax audit lawyer or tax litigation lawyer from TaxLawFirm.net can help you prepare, organize and present your case, and aggressively fight for your rights. Contact us to schedule a consultation with one of our certified taxation attorneys. Evening and weekend hours are available by appointment.