JG Tax Group's experienced Tax Resolution Specialists have an intimate knowledge of the IRS' audit guidelines. Our team includes a group of actual ex-IRS agents, ex-IRS tax attorneys and CPAs who are extremely knowledgeable of IRS procedures.
Taxpayers across the country are highly afraid of being audited by the IRS for a considerably good reason; a
tax audit is a procedure where the Internal Revenue Service tries to confirm the numbers that you've put on your tax return. Almost all taxpayers become confused when it comes to an
IRS audit. Many individuals are unsure of what an audit actually is. It is based upon a personal audit or a business tax audit. There are different types of IRS auditing methods:
There are several reasons why you should
never handle an IRS audit on your own. The IRS always has an advantage, due to the fact that the average taxpayer lacks adequate knowledge of tax laws to defend themselves against the IRS; included is a prime example of an actual client our company represented where the agent took complete advantage of the taxpayer's situation. As you can see in this letter
(Audit letter) we sent to the IRS agent, we took the initiative and confronted the agent about the multiple mistakes he made regarding our client's IRS tax audit.
These agents are highly experienced in interrogating taxpayers nationwide. They are considered the "detectives" of the IRS. It starts out with a simple IRS audit letter or perhaps a phone call asking you to discuss something as simple as your deductions. You then go to the IRS office thinking you can answer a few simple questions about your deductions and get yourself out of your audit situation. Usually, the agent puts you into their tiny cubicle which many people describe as the "interrogation room." Some IRS agents begin speaking to you in a nice, warm manner. He/she then starts to become more aggressive, scrutinizing your tax returns and other documents. In most cases, they make you believe you are being questioned about deductions for one tax year and they actually open up information pertaining to all available years. In 98% of all audit cases, the agent will send you a document request asking for your bank statements, canceled checks, deposits, receipts, driving logs, utility bills and home office expenses promptly after your first meeting. Most taxpayers are willing to send the agent all the documents they've requested. You really need an expert to review the documents requested by the agent before you send them in. The IRS is only entitled to certain information; if you send in all the documents they've asked for, it can hurt you in the long run.
In some cases, the agent may ask to come to your house. This may seem like an easier, more convenient approach for yourself; however, you need to keep in mind that all the IRS' motive lies in obtaining as much information about you as possible. You do not want an IRS agent at your residence! They are simply trying to see what assets you have inside of your home. If you claim to only make $20,000 a year and have nice furniture with beautiful paintings on the walls, a Mercedes in your driveway and a boat in your backyard, the IRS will immediately suspect you have far more income than you've reported on your tax return.
If an IRS agent contacts you, we recommend that you demonstrate the utmost kindness, but advise them that your representative (Enrolled Agent, CPA, attorney) will be contacting them regarding your case. If the IRS agent continues to question you, simply continue to inform him/her that your representative will be contacting them on your behalf. This is very important because whatever info you provide them with will be used against you, rather than for you.
The pros and cons of using a CPA or attorney:
As soon as you receive a
letter from the IRS in regards to an income tax audit, you should automatically assume that it's necessary to contact an attorney, or even a CPA to handle the issue for you. This may not be the correct solution, as many CPA's do not wish to battle with the IRS due to the fact that they have many other clients they need to protect, and fear that the IRS will retaliate by pursuing their other clients. A person with the title of "Attorney" doesn't mean they specialize in IRS rules, regulations, and consequential action against a taxpayer, such as an audit. In fact, most attorneys do not have expertise when dealing with the IRS. In short, do not be fooled by a prestigious title.
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