IRS audit representation services are recommended in several instances. Generally, if you’re unsure how to respond to communication from the agency, it’s time to bring in an expert. For example, if any of the following are true, expert IRS audit representation services are recommended:
- You receive an IRS letter and it’s anything more than a document request.
- The IRS is proposing a large tax, interest or penalty adjustment.
- Communication indicates potential fraud or other criminal activity.
- The audit is targeting a business entity.
- Your IRS audit notice includes collections actions.
- You don’t have the time or confidence to work directly with the IRS.
If you have received a letter from the agency and have any doubts regarding how to respond to the IRS, you can benefit from expert audit representation services.
Six Scenarios That Require IRS Audit Representation
Here is more detailed information on the tax situations that call for professional IRS audit representation:
- Your IRS letter is more than a simple document request – The IRS will always seek to contact taxpayers first via mail. If this communication concerns a simple document request with no notice of an adjustment or collection, you may be comfortable handling it on your own. However, if communication concerns anything more than a simple document request, professional representation should be considered.
- The agency is proposing a significant tax, interest or penalty adjustment – If the IRS has identified an additional tax liability or additional interest/penalties, partnering with an expert will help limit your exposure and help counter the agency’s claims.
- The IRS is alleging criminal activity, including fraud – If communication with the IRS indicates criminal investigation or investigation into willful activity, expert representation is recommended. At this point, you are legally exposed.
- Your business is being targeted by an IRS audit – If the IRS is targeting your business, it will likely involve complex factors. The audit may concern multiple aspects of tax compliance (payroll, sales, excise, etc.), involve more documentation and potentially involve third parties. Your entity’s structure will also impact tax compliance. Professional audit representation will ensure you’re prepared for onsite auditing and with collecting any needed documentation.
- An IRS audit also includes potential collections actions – If an IRS audit notice also includes an intent to collect back taxes, interest or penalties, consult with a tax expert. Your audit representative can help negotiate better repayment terms, including installation payment plans or offers-in-compromise.
- You don’t have the comfort or time to deal with the IRS – The IRS is overwhelming for many taxpayers to communicate with. If you have any doubts about dealing with the agency, or if you’re too busy to deal with the IRS directly, an experienced audit representative can spearhead communication on your behalf.
- Your IRS letter is more than a simple document request – The IRS will always seek to contact taxpayers first via mail. If this communication concerns a simple document request with no notice of an adjustment or collection, you may be comfortable handling it on your own. However, if communication concerns anything more than a simple document request, professional representation should be considered.
Who Can Provide IRS Audit Representation Services?
If your tax situation calls for expert audit representation, you’re in the market for an enrolled agent. Enrolled agents are more knowledgeable than any other professionals in the Internal Revenue Code and tax law. Here’s how an enrolled agent can assist with your audit:
- Provide expert guidance that’s customized to your tax situation – Enrolled agents are one of the few professionals certified to communicate directly with the IRS and represent taxpayers. To maintain good standing with the agency, enrolled agents are required to update their knowledge of the tax code as needed. This deep insight into tax law can be leveraged with your particular case in mind, ensuring your tax position is optimized and properly communicated to the IRS.
- Act as your official representative to the IRS – Enrolled agents are among the few professionals who are authorized to represent taxpayers to the IRS. They can best represent your interests to the agency by ensuring your communications are delivered on time and in accordance with what the IRS is looking for.
- Negotiate collections or repayment details – If an IRS audit eventually leads to collections, an enrolled agent will give you the best chance at negotiating a favorable repayment plan, whether it’s an installation plan, an offer-in-compromise or another approach. Enrolled agents regularly work with clients facing collections, so they can give you a realistic idea of what to expect during the auditing process.
- Assist with document collection or tax calculations – Your IRS audit will likely involve significant document gathering and may involve significant accounting preparation. If so, an enrolled agent will have the experience necessary to prepare you for an IRS audit, even if it includes some grunt work.
- Provide expert guidance that’s customized to your tax situation – Enrolled agents are one of the few professionals certified to communicate directly with the IRS and represent taxpayers. To maintain good standing with the agency, enrolled agents are required to update their knowledge of the tax code as needed. This deep insight into tax law can be leveraged with your particular case in mind, ensuring your tax position is optimized and properly communicated to the IRS.
Expert IRS Audit Representation Will Put You in the Best Possible Position During the Process
If you’ve received an audit notice from the IRS, the first thing to do is think through it calmly. No matter your tax situation, there are steps you can take to improve your position. These steps are rarely obvious to people unfamiliar to tax law, which is why the standard recommendation is for taxpayers to partner with an experienced enrolled agent. A trusted enrolled agent can represent your interests to the IRS, smoothly handle communication, and negotiate any collection actions. Ultimately, that’s about peace of mind.
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