An IRS audit is called an "Examination". These range from a correspondence examination where information is mailed in to answer requested documents or support - to an in-person examination. A taxpayer can represent themself or they can appoint a representative, such as a CPA or Attorney,
The Examination process starts with a request for documents. See real examples from recent examinations of these requests. Request #1 Click here which is then followed by further requests Click here as the exam progresses into specific deductions and amounts. A taxpayer is required to respond to IRS inquiries either directly or through a representative.
If the taxpayer fails to answer the IRS's requests, a "Summons" (see Click here ) can be served in person as a final attempt to communicate. It is in taxpayer's best interest to face these requests and handle them reasonably. In many cases, there will be no additional tax due, but
As a CPA, Carl Hebeler has practced before the IRS in representing both individuals and businesses. Often IRS Exams focuses on verifying Income to compare bank deposits to the amount reported on the tax return and also focus on self-employment cases and small business where the tax returns have deductions that need to be explained, supported, or verified. He has represented many taxpayers from basic removal of penalties for reasonable cause, in this example Click here for an Offer-in-Compromise, to a detailed in person exam covering multiple years of tax returns. These meetings occur either in the offices of Hebeler Accountancy or the IRS field office.
A resolution of an examination can be either "No Change" or a decrease in tax assessed, or an increase in tax.This IRS letter, Click here shows an initial tax due of $181,000 which we turned into a $6500 refund.
A final IRS workpaper Click here is provided to show these changes and another 30 days is allowed to review before either accepting or appealing. A final IRS letter is sent to conclude the findings and result of the examination Click here. Letters are either mailed, or faxed from the IRS. The IRS does not use email.
If you receive corresondence from the IRS, call Hebeler Accountancy to schedule a consultation. We will help you understand your options going into this process and you will professionally represented with your interests in focus.
An IRS publication is available for review Click here that explains the process from the IRS perspective.