Can I Face The IRS Audit Alone?
Receiving notice from the IRS that your business is being audited can be scary. Even if you are certain you did nothing wrong, an IRS audit can be unsettling and time consuming. There is no need to panic though, especially if you hire an experienced San Francisco tax attorney to help you through the process.
During an audit, the IRS conducts an inspection of your business’s records and financial information. But what are they looking for exactly? Most of the time, they are examining your records to be sure the information you reported to the government is accurate. If you are selected for an IRS audit, it does not necessarily mean there is a problem with your tax return. Often, the IRS selects returns randomly. Other times, common deductions such as home office expenses or meal/entertainment costs can trigger an audit if they appear higher than what the IRS considers “normal” for your industry and business size. Amended returns are also at a higher risk for audit because they automatically go through an added screening process.
You do not have to face an IRS audit alone. By hiring an experienced tax attorney, you are enlisting the help of a professional who is well-versed in tax law and is exceedingly familiar with the ins and outs of how the IRS operates. They have gone through the audit process with other clients and generally know what to expect in a way the average taxpayer would not. They also know exactly what information the IRS needs, which can save you from the instinct to turn over all of your records to the auditor, just to be safe. A qualified tax attorney will be able to help you compile the specific statements and files needed for the audit and help you figure out which ones to keep for yourself.
Hiring an attorney also provides you with attorney-client privilege. You may think this is not something you need if you did not do anything wrong. However, privilege allows you to openly communicate with your attorney about the matter without fear of revealing too much. It acts as an extra level of protection between you and the IRS.
Finally, if it turns out you owe a significant debt to the IRS, a skilled tax attorney may be able to negotiate a payment plan or even a reduction in your tax liability.
While an IRS audit is common and generally not reason for panic, letting an experienced San Francisco tax attorney help you with the process can decrease bumps in the road and provide valued peace of mind. Remember, hiring an attorney is not an admission of guilt in any way. Think of it more as enlisting the help of an expert. After all, you are busy enough running your own business. IRS audits are the business of experienced tax attorneys.
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.