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IRS Audit Help – What to Expect from an Audit

IRS Audit Help

By Justin Moyer, Tax Controversy Attorney Providing IRS/NCDOR Audit Help

What is a tax audit?

An income tax audit is a thorough examination of a taxpayer’s tax return undertaken by the IRS or the North Carolina Department of Revenue in an effort to verify whether the return states the taxpayer’s correct tax liability. This is not something you should face alone, getting IRS audit help from an experienced tax controversy attorney is vital.

When your tax return is selected to be audited, there are three main types of audits conducted:

  1. Correspondence Audit – the most common type is normally conducted by mailing information back and forth.
  2.  Office Audit – these take place at an IRS office.
  3.  Field Audit – these take place at your residence or place of business and are typically reserved for more complex situations.

Generally, taxpayers should strive to avoid field and office audits. It is important to consider the format of the audit along with the potential reason for the audit when beginning to work with a tax attorney to prepare. Arm yourself with the right team for IRS audit help. 

IRS audits are not typically random. The IRS selects returns that contain errors or present a triggering factor that is likely to indicate that the return is incorrect. Read our post, The Top 8 Audit Triggers – Catching the Attention of the IRS.

 Getting IRS Audit Help – Understanding the Scope of the Audit

Type of Audit

The type of audit will be described in the audit letter you receive from the IRS.  The information and documents requested will require you to prepare in-depth answers. It is highly recommended that you get a knowledgeable tax controversy attorney to represent you and advocate your tax return position before the taxing authority. Do not go at this alone – get the right IRS audit help. If you disagree with the position the IRS or North Carolina Department of Revenue takes as it relates to your tax return, you will need an experienced attorney to help you present your interpretation of the facts and the applicability of tax laws.

Timing

Understand that not every tax return selected for an audit has an error or any type of problem. The IRS could simply be seeking to verify the information contained in your return. Most audits occur within a few months after you submit a return. However, the IRS requires that you keep tax records and documents for at least 3 years after submitting your return. Any of your tax returns within that 3-year window could be selected for an audit. 

It is not limited to three years and if there are substantial errors detected, the audit window can expand to up to 6 years. When a taxpayer fails to file a return or if fraud allegations are included in the audit letter, the tax authority can extend the audit time frame to look back and assess tax liability for any previous tax year.

How long does a tax audit take?

The short answer is it depends. For simple correspondence audits, it may take a matter of minutes. More complex matters can drag out for years. When the IRS initially contacts you about an audit it will include a deadline for you to respond to the document requests. Ultimately the length of the audit depends on the complexity of the return, the type of information requested and the availability of the taxpayer to attend required meetings.  Often hiring a tax attorney to help with the IRS audit can expedite the process. 

Ultimately the IRS will close the audit by either proposing no changes or proposing adjustments to your return. You will get a report of the IRS findings and a letter that allows you 30 days to appeal if you disagree. This is called the 30-day letter.

Right to Appeal

Within 30 days you can request an appeal with the IRS office of Appeals. Be aware that in correspondence audits, the letter proposing adjustments also serves as a 30-day letter. Some taxpayers may overlook this letter and end up losing their ability to appeal the audit findings. 

If you do not respond to the letter proposing adjustment or the 30-day letter, a 90-day notice of deficiency will be sent. There are many different ways to appeal based on the type of issue presented.  A knowledgeable tax attorney will be able to explain your appeal options based on your particular situation. 

If you are facing a tax audit it is best to seek the professional guidance of a seasoned tax attorney. At Murray Moyer PLLC, the tax attorneys and tax professionals will fight for you and protect your rights. Contact their offices today for a consultation and get assistance with IRS audit help.