You’ve been selected for an IRS audit—do you need professional representation? Here’s what you need to know.

How Do You Trigger an IRS Audit?

Before we dive in, it’s good to know how an IRS audit can be triggered. Sometimes an audit happens because there’s a discrepancy, like a math error or a typo. Missing a deadline for filing a tax return, deducting too many business expenses, claiming too many charitable donations, and reporting too many losses on a Schedule C can also result in an audit. If you keep these things in mind, it can help you stay compliant while reducing the chance of an audit.

Different Types of IRS Audits

To answer the main question of if you need professional representation during an audit, you need to consider the complexity of the issue. The answer can lie in the type of audit being conducted. There are generally three types of IRS audits. Depending on the type, you may need representation or, at the very least, a consultation with a professional.

The Types:
  • Correspondence – this is the most common type of IRS audit. In fact, they comprise roughly 75% of all IRS audits. This audit involves the IRS sending a letter in the mail requesting more information about a particular part of a tax return. If it is a simple issue and you have the documentation, you can handle this yourself. Provide the requested documentation and the matter should be put to rest. If you are missing documentation, then you may want a professional to assist you in resolving the matter. Remember–never ignore a letter requesting more information if you receive one. Doing so will only aggravate what should otherwise be a simple correspondence.
  • Desk – also known as an office audit. If the IRS has questions about your return that are too complex for a correspondence audit, but too small for a field audit, you will get a letter in the mail requesting that you come into an IRS office for the audit. In general, a desk audit is more detailed and may have more issues. Typically, it is in your best interest to seek professional help before an office audit. At the very least, consider a consultation.
  • Field – field audits are the most comprehensive and detailed IRS audits. They are also the most intrusive and serious. When there are major problems or concerns on your return, the IRS will send an experienced agent to visit your home or place of business to examine records. We highly recommend you hire representation for this type of audit.

Benefits of Hiring Professional Representation to Navigate an Audit

No matter what type of IRS audit you’re dealing with, there are benefits to hiring a tax professional to assist you. Here’s what you can gain.

Professional Expertise

At the end of the day, professional expertise is what you stand to gain the most. And it’s one of the most important benefits. Tax professionals have extensive knowledge of tax laws and IRS procedures. They can help you understand the tax issues involved and help you achieve the best outcome.

Saves Time

No matter what type of audit you’re dealing with, they all take time to sort out. Even if you’re capable of handling one, it can take you time to figure out how to do it right, especially if it’s your first time.

Luckily, many experts out there have managed IRS audits for businesses of all kinds. They will be able to manage each step in the audit process with maximum efficiency and speed. This will allow you to get everything done before important deadlines arrive, allowing you to avoid fines and other penalties.

Help You Avoid Mistakes

During the audit process, you could make mistakes. Making errors can sometimes lead the IRS to think you’re hiding something (even if they were just honest accidents). On top of that, some people have strong emotions about dealing with the IRS. That can sometimes lead to less than professional interactions with IRS agents.

These mistakes can be avoided by using professional representation. Not only will they ensure forms and processes are error-free, but they have a lot of experience dealing with the IRS. They don’t have a personal stake in your audit and will focus on the job at hand. Their only concern will be to provide you with the best possible outcome for your IRS audit.

Peace of Mind

One of the other most significant benefits of hiring a tax professional is the peace of mind it provides. No matter what, dealing with the IRS can be stressful and emotionally taxing. Knowing you have a knowledgeable advocate in your corner can alleviate much of the anxiety associated with an audit.

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If you’ve been chosen for an IRS audit, the professional representation you can find with our firm can keep your worries at bay.

Gaylor Tax Services is Here for You

If you’ve been chosen for an IRS audit, the professional representation you can find with our firm can keep your worries at bay. We are ready and willing to answer any questions the IRS may be asking of you.

We are also here to help with your other tax needs, including entity selection and restructuringtax planning, and tax preparation. Our experts are here to answer your questions year-round, so do not hesitate to contact us. We are located in Phoenix, Arizona, but can assist you anywhere in the state.

By Published On: March 20, 2024Categories: TaxesTags: , ,

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