IRS audit representation

Getting a letter from the Internal Revenue Service is like seeing a police cruiser pull out behind you. You have probably not done anything, but you immediately start going through everything you might have done. How fast was I going? Did I signal that lane change? What do I say to get off with a warning?

The difference is that when a police officer pulls you over you cannot ask them to wait while you call somebody who knows the rules. With the IRS you can, and you should, because most of the damage in an audit is self-inflicted. People volunteer information nobody asked for. They guess at an answer rather than saying they will check. They hand over three years of bank statements when the letter asked about one deduction. An audit that starts narrow and stays narrow usually ends quickly. An audit that goes broad ends somewhere else entirely.

So I take the conversation off you. Before anything goes to the examiner I need to know whether the return is actually right, because that changes the whole approach, and knowing it early is worth more than any argument made later.

The three kinds you might be facing

Correspondence audit. Conducted entirely by mail, usually about one or two items. These look minor and mostly are, but ignoring one converts it into an assessment you then have to unwind.

Office audit. You are asked to come into an IRS office with records. Broader than a mail audit and more of a conversation, which is exactly where unprompted answers cause problems.

Field audit. A Revenue Agent comes to the business, or to your representative's office. These are the serious ones. They are open-ended by design and the Agent follows what they find.

If you are facing a field audit, do not handle it alone. Call me before you schedule anything.

How it runs

1. Bring me the letter. The notice number and the list of items tell me what kind of examination this is and how much room there is.
2. You sign a Form 2848. From then on the Revenue Agent contacts me.
3. We work out what actually happened. Sometimes the return is right and we prove it. Sometimes it is not, and that changes the strategy rather than ending it.
4. We assemble and reconstruct the records. Statements, invoices, logs, calendars, vendor copies. There is usually more of a trail than people think.
5. I meet the Agent. Answering what was asked, in writing where possible, and nothing beyond it.
6. We review the report, and appeal it if it is wrong. You are not obliged to accept an examiner's conclusion.

What having worked there is worth

I worked for the Internal Revenue Service. I know what an examiner is trying to establish, which questions are procedural and which ones matter, and what a complete answer looks like to the person receiving it. That is not a trick and it is not a connection. It is knowing the process well enough not to waste your time or theirs, which is most of what shortens an audit.

Being in Exeter matters here too. If your examination is being worked in New England, somebody can be in the room. Hire a firm that mailed you from two thousand miles away and every meeting becomes a phone call.

If the audit is already over

If you were audited, did not respond, and now have a bill, that is not necessarily the end of it. Audit reconsideration exists for that situation, particularly where the assessment came from a return the IRS filed on your behalf because you had not filed one. Those two problems usually arrive together, so start at unfiled and back tax returns.