Tax Audit FAQ: Common Issues When Dealing With the IRS

Tax season is upon us, and that means the potential for audits is high. If you’re like most business owners, you want the peace of mind that you won’t be hit with an audit. It pays to be informed on the matter, so we’re providing you with answers to some common questions.

And as always, if you need experienced legal counsel regarding your taxes, don’t hesitate to contact the Law Offices of Mary E. King. Our extensive experience handling tax matters ensures that you will have an advocate in your corner to assist you.

An audit is a review of a business’s records by the IRS. The IRS can audit your business for the previous three years (sometimes more) if they have a reason to suspect fraud. You will be notified in writing by the IRS of an audit, and you should be prepared to cooperate with their request for information. If your records are not in good order when they come for an audit, don’t try to be clever and hide things. It will only make things worse for you.

The IRS estimates that the probability of being audited is very low, less than 1 in a 166. However, any organization with more than $10 million in gross receipts has a higher chance of being audited. For example, an organization with $1 million in gross receipts might be audited once or twice over the course of ten years. An organization with $10 million in gross receipts would be audited about twice or three times over the same time period.

The first step in dealing with an audit is to be aware of your rights. The IRS has the right to inspect records and ask for information, but it cannot just show up on your doorstep unannounced. If you are contacted by the IRS, and they request records, you have between 15 and 30 days to provide them with the requested documents. 

In this timeframe, it is advised that you compile sufficient records to provide as much detail about your purchases as possible. If necessary, work with an IRS tax attorney Sarasota, Florida specialist like Mary King. She and her team can make sure that you are adequately prepared for your audit.

The IRS will notify you of an audit by mail only. Therefore, if you receive an email or phone call about being audited, it is most likely a scam. During tax season, such scams are especially high, so be on your guard concerning any communication other than mail.

If you don’t have the expertise or knowledge to handle your audit, it’s a good idea to hire a tax professional. It’s also worth noting that if you represent yourself in an audit, the burden of proof is on you. But when you hire an IRS tax attorney in Florida like Mary King, you will have an experienced professional who can guide and direct you as to which documents you need and how to respond to the IRS.

If the audit turns out bad, you can always negotiate a deal. The IRS will most likely not put you in jail if your audit goes bad, but they will expect you to pay back what you owe. However, it’s also possible that the IRS’s criminal investigation division will get involved. If this happens, do not delay in getting an IRS tax attorney Florida law firm to represent you. Moreover, don’t speak to anyone else about the matter—only your attorney.

The IRS usually won’t put anyone in jail because of an audit. Still, if you’re concerned about being audited for any reason, it’s best to have an attorney in your corner.

Zero. Once you’ve been selected for an audit, the IRS will follow through with it without fail. 

The best way to deal with an audit is to be prepared for one. When you know what the IRS will ask, you can have your records in order before they contact you. The IRS does not have a list of people who are going to be audited in advance, so it doesn’t hurt to prepare for an audit before being contacted.

Mary has proudly served Florida residents and business owners in numerous tax matters. With over 30 years of experience, you can trust you’re getting knowledgeable legal counsel. Call 941-906-7585 or submit this contact form to get started.

The information in this blog post is for reference only and not legal advice. As such, you should not decide whether to contact a lawyer based on the information in this blog post. Moreover, there is no lawyer-client relationship resulting from this blog post, nor should any such relationship be implied. If you need legal counsel, please consult a lawyer licensed to practice in your jurisdiction.