Having someone who understands the dynamics of the IRS and various states is an asset for anyone facing an inquiry or audit. We provide a level of comfort to our clients in these situations. Whether you need us to respond to an inquiry or assist with an audit on your behalf, we will represent your interests in these situations through our in depth knowledge of tax laws and IRS or state regulations and procedures.
Prior to an audit
No individual or business wants to receive that dreaded letter from the IRS or state requesting further information from them. Here are a few ways to try and avoid being audited.
Inconsistency is a major factor that can lead to computer generated notices. Unless circumstances surrounding your business or personal life have changed year over year, significant increases or decreases in income and expenses will draw red flags and lead to these notices.
Documentation of all transactions of both income and expense is imperative. Such documentation includes but is not limited to, bank statements, credit card statements including the individual itemized receipts, payroll reports and details, support for all medical and charitable expenses, support for all rental expenses. This documentation should be saved and organized for easy access if needed in the future.
Under reporting of income and over reporting of expenses are major areas that generate additional tax liabilities by the IRS and states. It is imperative to ensure you report all income even if received in cash and to have support for all expenses so any questions raised by the IRS or states can be answered quickly and without any concerns.
The initiation of an audit
The IRS or states will only initiate an audit through mail. The IRS or states will never call or email you seeking information or requesting personal data.
If you receive a letter, contact us immediately.
If you are comfortable we can have you sign a Power of Attorney so we can limit the burden of the audit on you as much as possible.
We will analyze the notice and contact the IRS or state on your behalf as well as work with your assistance to gather all of the requested documentation.
We will work throughout the audit to correspond directly with the agents and negotiate on your behalf for the most favorable outcome.