Taxpayers facing an audit from the Internal Revenue Service often come to me confused because they didn’t do anything wrong, or illegal, to warrant an audit. More often than not, that is the case. The IRS may decide to audit randomly or based on, what they believe, is a red flag on a previous tax return. That does not mean the taxpayer did anything wrong or is guilty of impropriety. That being said, if you are facing an audit, I always advise you to hire an experienced tax attorney to represent you. Here are a few reasons why it’s important to hire an attorney when you’re faced with an IRS audit.
Tax attorneys understand the law and are able to take your legal situation as far as necessary to obtain a successful result. They are experienced in working with the IRS and have navigated audits and know what to expect from the IRS, in a way the taxpayer may not. We know the format, the questions and the documentation that the agent will request. We review your information and provide it to the government agent in an organized fashion which saves the government agent’s time and energy.
Additionally, when you hire an attorney, you have an attorney-client privilege. Even though you may not have done anything wrong or illegal to warrant an audit, having that privilege allows you to freely communicate with your attorney. It gives you, as the taxpayer, an added layer of protection and confidence when facing the IRS.
Taxpayers often believe that hiring an attorney will make them look guilty in the eyes of the IRS or government agency. The bottom line is you have the right to representation. And as a business owner, you are busy with your own business and it’s more efficient for you to focus your time and energy running your company.
Remember that being audited is a very common practice and it does not mean you’ve done anything wrong to warrant the action. That being said, the audit process can go more smoothly by letting an experienced tax attorney navigate the IRS and audit waters for you. Think of the attorney as a resource and your representative; not as a defense against guilt.
Allison Soares is a partner and tax attorney at Vanst Law. Before starting her own practice, Soares was a partner at a tax law firm where she honed her skills handling a wide variety of tax and employment-related cases. In addition to her legal work, she has worked in accounting and utilizes that knowledge to her advantage while handling cases involving EDD audits.
