Audit representation or audit defense refers to a process in which a tax professional represents a taxpayer during an audit or examination by the IRS or a state taxation authority. Audit representatives must have permission to practice in these circumstances, therefore only CPAs, Enrolled Agents and attorneys are qualified to represent an individual or business during an audit.
What Does An Authorized Representative Do For A Taxpayer?
When faced with an audit, an audit representative will:
- Develop strategy used to defend the taxpayer and provide advice about how to proceed
- Help to prepare documents requested by the taxing authority
- Handle all correspondence on behalf of the taxpayer
- Attend all meetings so the taxpayer does not have to be present
What To Do If You Get Audited?
We understand that your first reaction is panic when you receive an audit letter from the IRS or state taxation authority, but knowing how to proceed is the first step in reacting to this less-than-pleasant set of circumstances. The first thing you want to do is to not ignore the letter. This is actually the worst thing you can do. Every letter advising you of an audit requires a quick and immediate response. You can request a time extension to give you an opportunity to decide how to proceed and to seek audit representation or gather documentation, but do not delay in making that first initial contact.
Once you have received an audit request, here are additional steps you should take:
- Decide if the audit requires that you have audit representation – Many times, the letter just asks you for something minor, like sending in copies of documentation or supplying some additional information. But if it is more than that, you are asked to meet face-to-face with an agent or you are unsure of how to respond to the audit, you should consider seeking audit representation or should at least speak to an experienced tax professional to obtain some advice about how to proceed. Don’t worry about sending the wrong message by hiring an audit representative – the IRS actually prefers dealing with professionals that know just how to prepare the documentation and information that is requested and appreciate when emotions are left out of the equation.
- If you opt to have someone represent you during an audit – You’ll need to grant power of attorney to your audit representative if you decide to have them handle the specifics of the audit on your behalf. By doing this, you don’t need to be present during any conversations or meetings.
- Give the IRS what it wants – If you are asked to supply information or documentation, be sure to give the IRS what it wants, but don’t supply any additional information that is not asked for or that can be used against you if it hasn’t been specifically asked for.
What Happens Once The Audit Is Completed?
If you are unsatisfied with the outcome or your audit or with any penalties or interest assessed, you can negotiate your case. Tax negotiation is best left to a tax professional, and if you have had an audit representative handle your case through this point they will be well equipped to handle any tax negotiations required to settle your case to your benefit. Sometimes, the IRS is more willing to negotiate than you might think because they want to bring the case to resolution quickly and effortlessly. Dragging out a negotiation is not in the best interest of the IRS so that may be to your advantage when trying to reduce your settlement.
Why You Should Consider Using An Audit Representative
Unless you have been requested to supply just some minor verification or documentation to clear up something questionable, hiring an audit representative is likely in your best interests. Someone that is experienced in dealing with audits and the IRS on a regular basis will be able to provide you with the most sound advice about how to proceed and will know just how to deal with the requests of the auditor. He or she will also know how to supply just what is needed, can help you prepare documentation and can negotiate on your behalf once any final outcome has been determined.
Have You Been Audited? Contact Us Today!
If you have received a letter about an audit from the IRS or state taxation authority, speaking to an audit representative should be your first line of defense. Call People’s Tax Relief for a free, no-obligation tax consultation at 866-788-8069 or fill out the form on the side of this page and one of our experienced tax specialists will contact you. During this consultation, we will discuss the specifics of your audit request and will let you know how an audit representative can help you through this process.