IRS Audits on the Rise: Likely Increase in Austin Tax Litigation

February 16, 2011

It's that time of the year again: tax-return season. However, this year the stakes are even higher than usual. The IRS announced that it plans to audit 11 percent more tax returns in 2011 than it did last year.

IRS audits are not pleasant. Not only do they require extensive documentation while placing a great deal of mental stress upon a person or business, but audits cause tax law issues to arise. These legal tax issues are best handled by a tax attorney. An audit does not mean that the filer did anything wrong, yet it should always be taken seriously.

Of course, the ideal situation is to avoid an IRS audit. Hiring a licensed CPA to prepare your tax return can be helpful towards avoiding an IRS audit. If you choose to do the return yourself, consider preparing it neatly through a computer and always ensure that you have the documentation to back up all claims you make.

Unfortunately, IRS auditors will be more aggressive this year; Even the best-prepared tax return is at the mercy of the IRS. There are two types of audits that an individual or business may face:

- Office Audits - selected categories of expenses are chosen from the tax return. The filer must bring in documentation, such as checks or receipts, to prove that the claimed deductions are legitimate.
- Field Audits - the IRS undergoes a detailed examination of the entire tax return. The person or business must substantiate every item.

Many hardworking people and businesses in Travis County will be scrutinized through the IRS audit process. Fortunately, an Austin tax attorney can be an invaluable advocate for resolving issues with the IRS.

The Role of a Tax Lawyer

An experienced tax attorney may take on one or several roles, depending on his practice. Most tax lawyers practice in tax litigation. Tax litigation typically results when the IRS wants money from a business or person, but the filer disputes that they owe the government the money.

Tax litigation may encompass a variety of stages, not just IRS audits. It can occur in tax appeals, Tax Court suits, District Court tax suits, failure to file tax returns, tax fraud and even sales tax issues.

Some tax lawyers practice in tax collection, as well. Tax collection issues usually involve situations where a person or business owes the IRS money, often through back-taxes, so the IRS places a tax lien on someone's assets. Whether the tax lien is legal or illegal, the tax attorney works to find a solution or compromise to the IRS' tax collection efforts.

Act Now, Not Later

The sooner you involve a tax lawyer in your IRS audit the better they can help you. An experienced Austin tax attorney will thoroughly handle your tax dispute throughout any stages necessary to achieve a resolution. Contact a tax lawyer for a confidential consultation where you can explain your issue to an expert.

Article provided by John McDuff, Attorney at Law
Visit us at www.johnmcduff.com/