Filing your taxes with the IRS is something that you have to do every year. There's always a risk of an audit, but you can minimize that by having a properly qualified professional do your taxes for you. That same professional might also be able to represent you before the IRS if you are audited. If you need professional help with all of this, then consider Susan Lewis, a CPA who can provide you with IRS representation services.
2 Types of IRS Representation You Have Rights to
What is IRS representation? It's an authorized person who can represent you before the IRS during your audit. You can either use unlimited or limited representation.
Who has unlimited representation rights before the IRS? Credentialed tax practitioners who can represent you in front of the IRS for any and all tax matters are considered to have unlimited representation rights. This can happen regardless of whoever got your tax return ready. Enrolled agents have unlimited representation rights. So do attorneys. Certified public accountants also have this power.
Limited representation rights mean the tax professional can only represent you on the condition that they were the only ones to prepare and sign your tax return. Then, they're only able to represent you in front of IRS revenue agents and customer service representatives, or similar employees. They're not able to represent any clients if they didn't prepare their returns. They also can't represent clients in regards to collection or appeals issues, even when they did prepare the specific return that's in question.
Do You Actually Need IRS Representation?
In most audit processes, you don't need IRS representation to finish everything. You can represent yourself, just like you can in court. However, representing yourself in court can be risky if you're not a lawyer. You run the same risk here.
Even if you didn't do anything wrong, the IRS is going through your tax filings to find something that's not quite right. It could be something filed incorrectly, math that doesn't add up, or just something mistakenly unreported. Whatever it is, it can cost you in terms of penalties.
What Does the Audit Process Look Like?
When the IRS starts its audit process, it happens in sequential steps. Follow these the best you can to make a favorable outcome more likely.
- If the IRS flags your taxes for an audit, they'll send you an Audit Notice.
- Respond to the notice by picking between in-person or by-mail audit.
- Gather up additional forms and information the IRS requests.
- The IRS will review your documents or meet with you before giving you their judgment.
- You can appeal any judgment they issue.
Once you get an Audit Notice, you have the right to contact a representative to work with you through this whole audit process. Pick someone you can trust as quickly as possible after you get the notice but before you respond to it. They can take a lot of the stress out of this for you.
How Do You Cooperate with Your IRS Representative?
Once you pick someone to represent you through your IRS audit, you need to arrange for their services. Then, you'll start getting ready for your audit. The representative you choose should guide you on what to do. In all likelihood, they'll provide you with a list of documents that you need to collect as promptly as you can. Following that, your representative can help you get a strategy ready.
Your representative will walk you through the details of the case the IRS is making against you. Every IRS argument will be detailed in the notices that you get. Your representative can deal with each of these concerns by covering them on a point-by-point basis. This puts you both on the same page in advance of your IRS meeting.
It's essential that you provide your representative with all the information necessary and promptly so they have a chance to get sufficiently ready. You also need to be sure that you have all tax information from recent years available. The IRS can look into your tax returns and finances going back three years. Your representative needs access to this same information on your end to get ready.
Three Common IRS Audit Outcomes You Can Expect
At some point, the IRS will finish the audit investigation. They will then reach a judgment specifically for your case. There are three typical outcomes at this point.
In the first scenario, the audit will end without any changes to the taxes you have filed, paid, or owe. The IRS will be satisfied with what you've done so far and not require any changes to your personal taxes.
In the second scenario, your audit process might end with a judgment you agree with. If so, accept it as is, and life goes on.
In the third scenario, you'll get a judgment that you disagree with. In such cases, you can file an appeal. Your representative can give you help with this, and you can also request an IRS manager meeting. In this meeting, everyone will gather to talk about the audit findings and discuss their options. After that, you can appeal or choose mediation.
Trust Your IRS Representation to an Authorized Expert!
Filing taxes is stressful enough, but an IRS audit can be even more frightening. Fortunately, you have rights, and one of them is the right to IRS representation on your side. See what your tax representation options are by contacting us as soon as you can. And the Lewis.CPA team will help you!