Audits are scary. No taxpayer every wants to be audited. For our purposes, we use the term audit when the IRS is looking at your tax return and they otherwise wouldn't be.
We love audits.
There are various types of audit. The simplest is a computerized audit. This is when the IRS sends you a notice proposing changes to your tax return (CP2000). This is usually triggered by the IRS computer system noticing something was "missing" or similar from the tax return that you filed. Believe it or not, computers can't always count. We have seen, more often than not, that these computerized assessments are incorrect. We can review the notice against the tax return you filed and determine if the notice is correct. If it isn't, we make the IRS fix it!
Another type of audit typically happens during tax season. This delayed refund audit is essentially the IRS reviewing your tax return before they issue a refund. The return being reviewed may not have any errors, but nonetheless the review process is long. We have seen these drag out for months. We can step into your shoes and correspond with the IRS to ensure this process doesn't take any longer than it needs to.
One of the more common types of audit that we see is the EIC / Child Tax Credit / Head of Household audit. This occurs when the IRS wants you to prove that you were eligible for the credits and/or deductions you claimed on your tax return. Anyone claiming these credits and/or deductions could be randomly selected for audit, but we more commonly see these audits for taxpayers claiming children who aren't their son or daughter, claiming Head of Household when married, or claiming different dependents each year. We can help the IRS connect the dots to prove you can claim these credits and deductions.
Although most of the communication for the previously-mentioned audits is done by phone and mail, they are not any less difficult than a full blown sit-down audit. This is the audit that most people think of when they hear the word. The one where the IRS invites you to their office for a visit and asks for your shoe box full of receipts. We are able to represent you at this meeting and get everything reviewed without you ever having to face an IRS agent!
Let's say you didn't have one of our Tax Experts on your side during one of the above audit situations, or even another audit situation. You may need to request an audit reconsideration.
An audit reconsideration request may be submitted if there is new information which was not considered during the initial audit.
What does that mean?
- You forgot to provide something to the IRS.
- You found additional documents after the audit was complete.
- You find that although a document was submitted, the IRS agent did not review or consider it.
- or, something similar along these lines.
We helped a client in 2016/2017 who had previously been audited. The IRS disallowed 100% of their income tax withholding, even though it was clearly present on the Form W-2 and the IRS's own records, simply because our client could not provide pay stubs to prove the withholding shown on the official documents was real. The client had no idea the IRS had done this, thinking the tax was due to a disallowed credit. After requesting an audit reconsideration, our client received a refund of over $12,000 consisting of their proven withholding plus the penalty and interest that had been paid on the tax assessed by the IRS.
If you've ever been audited, it may be worth it to have a tax expert review the outcome of the audit. We find our clients money every day.