Taxpayers' Rights in the IRS Audit Process

July 19, 2012

Few people enjoy the chore of paying taxes each year. Many feel a certain victory when they can cross the task off their "To Do" lists for the year and the last thing they want to do is go back and revisit their taxes in an IRS audit. Audits can be intimidating because many do not know what happens during an audit. Accordingly, taxpayers should understand the audit process, their rights during an audit and how legal representation during an audit can help them.

Audit Types

There are four types of IRS audits, and each one presents a more escalated issue than the previous one:
-Correspondence: In this type of an audit, the IRS requests information via letter, usually because information on various forms is missing or does not match other records.
-Office: In an office audit, the taxpayer needs to go to an IRS office to discuss a tax return. Usually such audits occur when the correspondence audit did not resolve the questions the IRS had about a tax return. Many common issues that trigger office audits include medical expense deductions, moving expense deductions, rental income and employee business-expense deductions.
-Field: In a field audit, an IRS agent goes to a location to examine financial records on-site. These audits are often conducted on those who are self-employed and earn over $100,000 per year.
-Criminal: When the IRS suspects a person of tax fraud the Criminal Investigation Division of the IRS conducts an audit to investigate the matter.

Taxpayers' Rights

Taxpayers do have rights during the audit process, including the right to:
-Have IRS employees treat them professionally
-Confidentiality and privacy with respect to tax matters
-Know why the IRS is requesting information
-Know how the IRS will use the information
-Know the penalties for failure to provide the requested information
-Have representation during the audit
-Appeal disagreements

Contact an Attorney

Those facing IRS audits should seek representation during the process to help protect their rights. Having an experienced attorney's assistance can be invaluable, particularly given the fact that if there are disputed issues that arise during an audit, the IRS decides the outcome, as opposed to a neutral third party like in other contested legal matters.

A lawyer can also help a person communicate more effectively with IRS representatives and control the flow of information between parties. Additionally, an attorney will know what is important to preserve as evidence and to help build a record should the matter need to proceed to litigation.

Article provided by Joseph R. Viola, P.C.
Visit us at http://www.jrviola.com