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Federal and State Income Tax Audits

Federal and State Income Tax Audits

Once your federal income tax return is filed the government generally has three years to audit. There are three main types of audits: correspondence audits, office audits, and field audits.

Correspondence Audits

A correspondence audit is performed through the mail. Sometimes the IRS simply has information that differs from what was reported on the tax return. If this occurs, the IRS will generally mail a CP2000 notice. In these instances it is important to review the IRS letter carefully to determine whether the information reported is correct. The IRS information can be incorrect or incomplete in many cases. It is important to respond to such discrepancies with an explanation of all of the facts and any law that will reduce or eliminate the amount of tax the IRS seeks to assess.

Office Audits

Office audits are located in an auditor’s office. Usually these audits are of limited scope, simply requiring proof of certain pre-selected items on your tax return. It is important to prepare for these types of audits by compiling all supporting documentation in a manner that can be easily understood by the auditor. If anything is missing or incomplete, an explanation for the discrepancy must be provided to the auditor.

Field Audits

A field audit is conducted by a Revenue Agent, usually at the taxpayer’s place of business. Field audits are generally larger in scope or more complex than correspondence or office audits. If you are contacted by a Revenue Agent for a field audit, it is advisable to retain counsel who can request that the audit be performed at the attorney’s office, so as not to disrupt your business. Our attorneys are experienced in resolving complex matters in our clients’ favor, reducing or eliminating penalties and interest, and preventing civil audits from becoming criminal matters.

What to Do in an Audit Situation

If you are selected for an audit, experienced counsel should be retained to help minimize your overall liability, and to help you understand and cope with the potential consequences of the audit. Our experienced attorneys have expertise in representing clients in audits with the Internal Revenue Service, Franchise Tax Board, Board of Equalization, and various other state and local taxing authorities. Our goal is always to obtain the best possible result for each client.

Facing an audit can be very stressful, and potentially overwhelming. Our experienced attorneys alleviate our clients’ stress by keeping them up-to-date, promptly responding to client questions, and explaining complex matters in a way that is easily understood. The tax code is often very convoluted, especially in an audit situation. Our team of attorneys and professionals is highly educated and has significant experience–assets which are vital in obtaining a favorable result. To schedule a free consultation, call 1-800-358-0305 or contact us online today.

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