Daniel Rosefelt, attorney and CPA, leads a team with substantial experience in representing clients facing an audit of their income, sales or employment tax returns by the IRS or state taxing authorities. In an audit, the government is represented by a team of well-trained specialists, including audit examiners, accountants and attorneys. If your tax return is selected for examination, you need to level the playing field.
IRS audit rates are rising dramatically for all types of taxpayers. Within the past few years, the IRS audit rate for individual taxpayers has risen more than 25%; for high-income taxpayers, it has doubled. The IRS is currently in the process of randomly selecting and dissecting more than 5,000 1120 S-corporation tax returns, seeking information that will help tighten its grip on small business taxpayers in the years to come. It is not a time to be taking chances.
IRS audits generally fall into one of the following three categories:
- Office Audits
- Correspondence Audits
- At-home Audits
Typically, the audit process begins when you receive a letter stating that your tax return has been selected for an examination. This does not mean that the IRS is accusing you of lying, cheating on your tax return or engaging in any other wrongdoing. Rather, the goal of the IRS audit process is to increase overall tax compliance and revenue collected by the government, often by making examples.