A tax audit is an IRS investigation into the financial records of an individual or business for the purpose of enforcing current tax laws. Audits can be triggered by improper filing, inaccurate reporting, attempted tax evasion, and other discrepancies discovered in a tax return. Such discrepancies cause the IRS to question whether the information on a tax return is incorrect or misrepresented by the taxpayer and demand further examination.
If the results of an audit indicate that there were no errors on the original return, no further action is required on the part of the taxpayer. If the audit determines that false or incorrect information was reported, however, the taxpayer is responsible for locating and submitting any required documentation and paying any owed funds and applicable interest to the IRS.
Facing a tax audit? Contact the audit professionals at Pearson Butler for immediate guidance.
What Kinds of Audits Are There?
There are different types of tax audits the IRS may initiate:
- Correspondence Audit: A correspondence audit is generally the most uncomplicated, straight-forward type of audit the IRS can perform. Typically, the IRS sends the taxpayer a written request requiring the taxpayer to produce relevant receipts, canceled checks, and other such documentation that provide additional information regarding a specific area on the tax return. Documentation and communication regarding a correspondence audit are usually managed via the postal service.
- Office Audit: An office audit occurs at the taxpayer's local IRS office. The IRS will request specific documents to be brought to the office to perform the audit in person. The documents will be used to determine the taxpayer's compliance with tax laws regarding lawful income reporting and the correct amount of taxes paid or owed.
- Field Audit: A field audit involves an IRS representative coming to the taxpayer's home, place of business or the office where the tax return was prepared for the purpose of conducting a face-to-face investigation of the return. A field audit is considered a more serious, comprehensive review of the taxpayer's return.
- Taxpayer Compliance Measurement Program (TCMP) Audit: This is the most exacting process a taxpayer can face and requires an extensive investigation into the entire tax return. Documents must be acquired to substantiate all the data on the tax return, including birth certificates, marriage licenses, receipts, canceled checks, etc. The results of these audits are compiled for statistical purposes.
Why Involve an Attorney Before & During the Audit Process?
A tax attorney can explain the taxpayer's rights and what to expect during the audit process. It is beneficial to have a qualified attorney present for certain reviews, such as field and TCMP audits. A lawyer can advise the client on important questions to ask the IRS regarding the type of audit being done, which specific documents are required to be produced, options for reimbursement, and other factors relating to the case.
An attorney with experience in tax audits can also ensure that the taxpayer does not give the IRS unnecessary documents or information unrelated to the specific investigation, which could potentially create additional problems for the taxpayer, such as another audit. Depending on the type of audit being done, the tax attorney can be present for the auditing process with the client and the IRS representative to ensure the taxpayer's rights are protected. If a taxpayer moves forward with the audit without legal representation, the auditing process can be stopped at any time for the person to obtain legal services.
Delivering Experienced & Dedicated Tax Audit Counsel in Utah
Pearson Butler has years of experience in handling tax resolution and possesses extensive knowledge on current tax laws. The firm’s audit professionals are proficient in the process, including programs available with the IRS for negotiating debt settlement.
Pearson Butler recognizes that each client comes with unique financial circumstances. Employment status, income, tax debts, and financial abilities and limitations must all be considered, as these factors directly influence the course of action the client will be advised to take.
The firm is prepared to handle a variety of IRS-related situations, negotiating circumstances involving the following, and more:
- Property leans
- Off-shore bank accounts
- Payroll trust fund complications
- Back tax debt issues
- Delinquent tax returns
Serving individuals and businesses throughout Utah, Pearson Butler advises clients on how to organize and gather documentation requested by the IRS. Professional guidance simplifies the steps and streamlines the auditing process.
When you work with the firm, your tax lawyer will prepare you for the audit by answering questions about types and processes involved. You should refrain from volunteering information in the audit, and your lawyer will protect your rights by determining what does and does not need to be produced in the audit. Your lawyer can also advise you on what to do if requested receipts or documentation have been lost or cannot be located.
If the results of the audit determine that money is owed to the IRS, your lawyer can negotiate the terms of the reimbursement to make the process more manageable. This can be done several ways:
- Offer in compromise
- Payment arrangements
- Penalty abatement
- IRS bankruptcy filing
- Innocent Spouse Relief
Facing a tax audit can be stressful, confusing, and overwhelming. Pearson Butler has offices in South Jordan, Bountiful, and Utah County to ensure convenient access to experienced attorneys. With extensive expertise, our tax lawyers provide clients across Utah with the legal protection necessary for dealing with any type of IRS or tax concern.
Call Pearson Butler at (800) 265-2314 or contact the firm online.