IRS Audit Representation for Houston Individuals and Businesses
The IRS is stepping up its efforts to identify delinquent taxpayers, and that means more individuals and businesses than ever will require tax services like IRS audit representation. According to the IRS, the audit rate on wealthy individual taxpayers (those with net worth over $10 million) is set to increase by 2026 – taking the audit coverage rate from 11 percent (in 2019) to 16.5 percent in just a few years.
When an individual or business in Houston is targeted by an IRS audit, the first indication will likely be an IRS letter in the mail. It’s at this point that taxpayers should see IRS audit representation services through a qualified professional like a CPA or enrolled agent.
What do IRS Audit Representation Services Include?
IRS audit representation services are designed to guide an audited taxpayer through the entire process – one that can take years depending on the complexity of your tax accounts. Common IRS audit representation services include:
- Managing IRS correspondence – IRS audits include extensive back-and-forth communication between the agency and taxpayer. This may be done through mail or other means, and correspondence typically includes requests for additional tax information. An IRS audit representative can receive this correspondence on behalf of their client and provide the appropriate response.
- Gathering tax information – IRS audits may target multiple tax years, which means you’ll need to produce a pile of documentation to support your tax positions. This includes past 1040s, W-2s, 1099s, expense sheets and deductions, bank statements, credit card statements and more.
If your IRS problems are the result of insufficient bookkeeping or tax compliance, producing this documentation may be a challenge. IRS audit representation services can handle this challenge and use the financial information that is available for the client to build a clear picture of their taxes and to develop a larger audit strategy.
- Advising clients on optimal tax strategies – As taxpayers move through the auditing process, their IRS audit representative will provide timely guidance on how to address IRS requests, how to appeal certain judgements, and how to adjust future tax planning strategies to account for the audit’s results. It’s best to be proactive with the IRS’s decisions and make adjustments for future tax years as soon as possible to minimize tax liabilities going forward.
- Advising clients on better tax compliance measures – Lax compliance measures are a primary cause of IRS problems for business owners and can expose tax paying entities to underpayment risks and penalties. It’s important for business owners to review their tax compliance measures regularly for any weaknesses. This could be an issue with reporting income or expenses, an issue with classifying transactions, an issue with calculating tax obligations, an issue with record keeping – there are many potential gaps in a company’s tax compliance approach. An IRS audit representative is typically qualified to assess a client’s compliance measures and determine where improvements can be made. This can help prevent future tax problems with the agency.
Three Benefits of IRS Audit Representation Services
If you’ve been targeted by the IRS for an audit, there are several good reasons to partner with a CPA or enrolled agent for representation. They include:
Freeing up time and focus – Managing an IRS audit may feel like a full-time job to those who go through it. Between responding to the agency’s information requests, sifting through tax documentation and assessing tax strategies, there is a lot to do.
An IRS audit representative can oversee these technically complex matters that require expert-level tax knowledge – so the client doesn’t have to dedicate themselves entirely to the process. For business owners, this means you can continue managing your company while your IRS audit representative manages the auditing process.
Access to expert representation – The IRS expects taxpayers to be prompt and precise when responding to auditor requests. The agency will also leverage the full power of the tax code to hold audited individuals and businesses accountable for their full tax bill.
By partnering with an IRS audit representative, you’ll have someone on your side who can push back against improper IRS judgements. You will also have peace of mind knowing that your representative will respond to the agency quickly and with all necessary detail.
A long-range view of your taxes – During the course of an IRS audit, your representative will become familiar with your tax situations and how to improve it with better tax planning and tax compliance tools. While this won’t help with an ongoing IRS audit, a CPA can reduce your future tax obligations and protect your finances from any tax-related surprises for future tax years.
IRS Audit Representation Services Save Taxpayers Time and Stress
IRS audits are ramping up in frequency, with billions of dollars being funneled to the agency to cast a wider auditing net. The result is many surprised individuals and businesses facing a lengthy auditing process.
If you’re among them, a trusted CPA or enrolled agent like Evident Pros can represent your interests to the IRS and ensure the auditing process resolves as quickly and painlessly as possible.
