The word “audit” alone can cause unnecessary anxiety and fear in all of us. It can mean a headache, extra paperwork, and more. An audit can result in several visits from or to an IRS agent, penalties, interest, or legal issues.
You are not alone. Many Americans are audited each year. It doesn’t have to result in financial or emotional distress, and you have options. We will discuss those in this article.
Can Audits Be Appealed?
The short answer is yes. Tax audits can be appealed, much like several other court rulings. According to the Taxpayer Bill of Rights (TBOR), you have a legal right to an appeal. Taxpayers are entitled to a fair and impartial administrative appeal of most IRS decisions. Taxpayers typically have the right to take their cases to court regarding penalties, findings, and more.
Each audit will result in a unique set of circumstances, so each situation should be reviewed thoroughly and carefully.
First Line of Defense
One of the first essential items to consider is a timeline. Follow the instructions explicitly that are laid out in your audit. A timeline will be established that you must follow regarding a response. It can be beneficial to work with an experienced tax attorney to ensure that you are meeting important deadlines or can assemble a request for an extension to allow you more time to adhere to the demands of the audit.
Postponing an audit allows more time to gather the necessary information to appeal the findings and work with experienced professionals to ensure you are within tax laws. In many cases, requesting more time to address the audit can work out in your favor.
It can be crucial to be brief in your response to an audit. Gather the required documentation to address the points of the audit without adding more information to “muddy the process.” Being brief can mean you leave out other years’ tax returns that were not requested. You may feel compelled to provide additional tax returns in order to provide sufficient evidence of your ability to follow tax laws, but this may end up prolonging the process or furthering the options for more audit issues.
Discuss the specifics of your audit with an experienced tax attorney to ensure you follow what is requested promptly, without providing further unnecessary information to prolong the process.
Taxpayer Bill of Rights
Know your rights. Each taxpayer should be aware of a fundamental set of rights when facing an audit. This set of rights is called the Taxpayer Bill of Rights. A summary of those rights is below.
The right to be informed. You have a right to know exactly what you need to do to comply with the tax laws. A right to have clear instructions regarding how to resolve the matter and a right to be informed regarding decisions made by the IRS.
The right to quality of service. Taxpayers have a right to receive a level of service that includes prompt and courteous explanations of necessary items in understandable communication and a right to speak to a supervisor should a reasonable quality of service not be met.
Taxpayers can object to findings and provide sufficient evidence through documentation to support their objection. Taxpayers also have a right to timely responses from the IRS regarding their objections or explanations.
The right to pay no more than the correct amount of tax. Taxpayers have the legal right to pay only the amount due, including penalties, and not a dollar more. The right to have these payments accurately posted is also apparent.
The right to finality. Taxpayers have the right to have a clear and communicated expectation regarding the amount of time they have to object to the findings made by the IRS.
The right to privacy and confidentiality. Taxpayers have the right to expect that the information they provide will not be disclosed unless authorized by the taxpayer. Taxpayers also have a right that any action from the IRS will comply with laws in place regarding search and seizure and more.
Right to representation. Taxpayers can retain experienced and professional representation to aid them in their appeal efforts.
The above list is not an exhaustive list of taxpayers’ rights. Being aware of the rights available to you regarding tax audits is vital so you can be fully prepared.
How Can a Tax Lawyer Help Me with my Audit?
If you are facing an audit, chances are you are experiencing emotional or financial distress or both. Though the process can feel overwhelming, when dissected and explained thoroughly, you can find a realistic strategy that protects your rights and obtain an outcome with which you can feel confident.
You don’t need to navigate an audit alone. Experienced tax lawyers can be hugely beneficial to your outcome. They are well-versed in tax laws and the implications of following them incorrectly. They can steer the ship and provide an educated analysis of your situation and what options you have each step of the way.
After years of working with clients that have issues with audits, we are confident that we can assist you as well. We will help you understand your rights, follow crucial deadlines, and ensure the IRS is following their necessary rights and restrictions as well.
Call our office today at (786) 522-0410 to speak with an experienced tax attorney. We look forward to assisting you.