Tax audits come in many shapes and sizes, ranging from correspondence audits to criminal investigations. The type of audit you face can impact how you should respond. It is possible for the scope of an audit to change as the government begins to ask questions and uncover new information. For this reason, it is important to obtain audit representation early in the process to ensure your rights are asserted at every phase.
If you receive a notice from the government indicating you are being audited, there is no need to break out in cold sweats. The first thing you need to determine is the type of audit you will be participating in:
- Correspondence Audit: A relatively simple process in which you are asked to document an item on your return by a specific date. Typically these can be completed without ever meeting face to face with an agent.
- Office Audit: The government may ask you to report to a nearby office and document one or more items on your return. Sometimes it is possible to avoid the office visit by providing documentation in advance of your appointment.
- Field Audit: This is the type of audit most people dread. You will be asked to substantiate various items on the return and meet with an agent, who will perform an extensive review of your documentation.
- NRP Audit: A National Research Project (NRP) audit is a lengthy and detailed audit in which the IRS asks you to document and prove every item on your return. This audit is performed to determine compliance levels, estimate the tax gap, determine what kinds of returns to audit and allocate audit resources.
- Criminal-Investigation Audit: If you are suspected of tax evasion, the government will conduct this type of audit to try to prove criminal intent.
Regardless of the type of inquiry you receive from the government, it is appropriate to seek audit representation to ensure that the responses you provide are consistent with their expectations. Failure to comply with the government can result is an expansion of the scope of the audit or more aggressive collection action on their part.
We have the right experience to provide audit representation for taxpayers that are facings inquiries from the collections and examination divisions of the IRS and state and local tax agencies.
Call us today for a free consultation.
Podraza CPA has the right experience to provide audit representation for taxpayers that are facings inquiries from the collections and examination divisions of the IRS and state and local tax agencies.