{"id":167,"date":"2021-03-05T08:34:18","date_gmt":"2021-03-05T08:34:18","guid":{"rendered":"https:\/\/sacramentotaxlawyers.com\/?page_id=167"},"modified":"2022-09-16T20:17:25","modified_gmt":"2022-09-16T20:17:25","slug":"audit-2","status":"publish","type":"page","link":"https:\/\/sacramentotaxlawyers.com\/audit","title":{"rendered":"Audit"},"content":{"rendered":"\n

Tax Audit Attorney<\/h1>\n\n\n\n
\"Tax<\/figure>
Jin Kim<\/strong><\/i>
Free Consultation<\/strong>
(916) 299-9913<\/a><\/strong>
Mon – Fri
8 AM – 6 PM<\/div>\n\n\n\n

Tax audits are one of the most serious financial threats facing individuals and businesses. Few taxpayers can afford thousands of dollars in assessed taxes, interest, and penalties, so it’s important to put an experienced audit defense attorney on your side. Tax attorney Jin Kim<\/a> represents clients under audit by the IRS, FTB, CDTFA, and other tax agencies. To schedule a free consultation with our experienced tax attorney, call the Law Office of Jin Kim at (916) 299-9913<\/strong>.<\/p>\n\n\n\n

Audit Notice<\/h2>\n\n\n\n

If you\u2019ve been selected for an audit<\/a> the IRS will notify you by U.S. mail – not<\/em> by telephone or email. Accordingly, be wary of any emails stating you\u2019ve been selected for an audit; the IRS never<\/em> sends an audit notice through email. The same goes for telephone calls or texts. Any calls, emails, or texts concerning notice of an IRS audit are probably tax scams<\/a> or identity theft schemes. An initial audit notice is always sent through the mail, although subsequent interactions with your examiner may be done by phone as well.<\/p>\n\n\n\n

Audit vs. Examination<\/h2>\n\n\n\n

Before we get to the heart of the subject, let’s discuss some important terms first. The most common term for an audit is, of course, an “audit.” However, this isn\u2019t the term used by the IRS. Rather, the IRS prefers the term \u201cexamination\u201d even though taxpayers use the term “audit.” IRS auditors are in fact called examiners. Throughout tax literature, you may see the terms \u2018audit\u2019 and \u2018examination\u2019 used interchangeably, as well as \u2018auditor\u2019 and \u2018examiner\u2019. They both refer to the same thing. While the audit may not be the preferred term by the IRS, it\u2019s the term most people are familiar with.<\/p>\n\n\n\n

Statute of Limitations<\/h2>\n\n\n\n

Once you receive your tax audit notice, you must identify the relevant pieces of information. The two most important pieces of information contained in your audit are (1) the kind of audit you\u2019ve been selected for and (2) the years for which you\u2019re being audited. At this point, it\u2019s best to familiarize yourself with the so-called \u2018three years rule<\/a>\u2019. This means that the IRS can no longer audit a tax year if three years have elapsed from the date of filing that year’s tax return. There are certain exceptions to this rule, such as when the IRS suspects the taxpayer committed fraud or when the taxpayer did not file a return. Accordingly, you should always<\/em> seek legal advice from a tax attorney<\/a> to identify the applicable statute of limitations for your IRS audit. Nevertheless, if you notice that you\u2019re being audited for a year that goes beyond the three-year rule, and it doesn\u2019t fall under any of the exceptions, then you should bring this information to the tax attorney’s attention during a free consultation.<\/p>\n\n\n\n

Types of Tax Audits<\/h2>\n\n\n\n

As mentioned above, your notice will tell you what kind of audit you\u2019ve been selected for. There are three types of audits<\/a>: correspondence audit, office audit, and field audit. In general, correspondence audits are the most frequent type of audit and the least serious. Office audits and field audits are more involved and often require the presence of legal representation.<\/p>\n\n\n\n

1) Correspondence Audit<\/h3>\n\n\n\n

Correspondence audits are the most common of the three types of IRS audits. It\u2019s estimated that out of a hundred taxpayers selected for an audit, around seventy to seventy-five people get chosen for a correspondence audit<\/a>. Correspondence audits are done through the mail. If you\u2019ve been selected for one, there\u2019s no need to go to an office and meet an auditor face-to-face. The correspondence audit method is preferred when the issues involved aren\u2019t too complex or the amounts involved aren\u2019t too hefty. For this reason, correspondence audits are often considered the easiest among the 3 types of IRS audits<\/a>.<\/p>\n\n\n\n

Send Copies, Not Originals<\/h4>\n\n\n\n

The most likely scenario during a correspondence audit is that you\u2019ll be asked to provide documentation. When sending your documents, it\u2019s best to send photocopies rather than originals \u2013 the IRS doesn\u2019t mind either way, but chances are you\u2019ll never see your document again, so it\u2019s best to send a copy instead. While a correspondence audit may be done mostly by U.S. mail, this doesn\u2019t preclude you from picking up the phone and calling the IRS if you have questions. Most of the time the phone number of the agent assigned to you can be found in the initial notice. If in the end you\u2019re not satisfied by the result of your correspondence audit, you have the option of asking to have an office audit. This might seem risky, but many correspondence audits which are turned into office audits may get closed without any additional tax liability.<\/p>\n\n\n\n

2) Office Audit<\/h3>\n\n\n\n

If you\u2019ve been selected for an office audit this means you\u2019ll go to an IRS office and meet with an examiner face-to-face. This is more involved than a correspondence audit, so the stakes might be higher. The idea of meeting an examiner face-to-face is nerve-wracking, but you can always take steps to make the process easier. One way to make the process easier is to bring your tax attorney to the office audit. After all, it’s your right to have an attorney present<\/a> during your office audit and interviews with the IRS.<\/p>\n\n\n\n

Delaying Your Interview<\/h4>\n\n\n\n

Your initial notice for an office audit will not contain a schedule for your audit, and that\u2019s because it\u2019s up to you to set the meeting. According to the Taxpayer Bill of Rights<\/a>, it’s your right to schedule your office interview at a time that’s convenient for both you and the IRS, so don’t feel pressured to bend over backward to accommodate your examiner. In fact, some tax professionals suggest strategically delaying your audit<\/a> by scheduling your interview as far out as possible, having your newly retained attorney postpone the interview again. As IRS examiners are under pressure to close cases the logic behind this tactic is that the examiner will have an incentive to close your case and move onto easier targets. <\/p>\n\n\n\n

Polite & Cooperative, But Protect Yourself<\/h4>\n\n\n\n

Once you\u2019re in the office, you should be polite to the IRS examiner, but not too helpful. Hostility can, and often does, backfire. Rather than meet the examiner with hostility, be courteous and professional. Your attorney should be present and likewise professional. If the examiner requests documents that exceed the scope of your audit, don’t take offense; have your tax attorney present to constrain the scope of your audit and ensure that the documents provided match that scope.<\/p>\n\n\n\n

An IRS examiner is trained to observe your behavior and to use it against you. You might notice that there are long stretches of silence during your audit. The purpose of this is to make you feel uncomfortable and blurt out things in an effort to have you admit wrongdoing. Don\u2019t take the bait. Don\u2019t make any more conversation than you have to. If you don\u2019t know the answer to the question, admission of ignorance can be better than manufacturing information.<\/p>\n\n\n\n

A common technique<\/a> that may be employed by the examiner is to ask about a particular year or detail that isn\u2019t included in the original notice. If you answer these questions you risk throwing open other years which are not included in the notice or which are beyond the three-year rule. If the IRS examiner tries to elicit this information from you, answer them gently but firmly by stating that the information isn\u2019t relevant to the returns being audited. A simple \u201cI have no idea\u201d also works well for questions like this.<\/p>\n\n\n\n

Speaking To The Supervisor<\/h4>\n\n\n\n

What do you do if the IRS examiner is rude or against you from the outset? The answer is that there isn\u2019t really much to do. Some tax professionals suggest asking to see their supervisor and reporting their behavior. After all, according to the Taxpayer Bill of Rights, taxpayers have the right quality service<\/a>; that is, to receive prompt & courteous assistance from the IRS and speak to a supervisor about inadequate service. This might work in some instances and you might get assigned a new auditor, but there\u2019s no assurance that it will always work. I suggest only using this in the worst-case scenario.<\/p>\n\n\n\n

Pro Tip<\/em><\/strong> – as should be apparent from the information on this page – it’s always<\/em> helpful to have an experienced tax attorney present during your audit. The attorney is better equipped to deal with difficult auditors<\/a> and requests for information beyond the scope of your audit. If you’ve received notice of an office audit, it’s highly advisable to retain a tax attorney and have them present during<\/em> your interview.<\/p><\/blockquote>\n\n\n\n

3) Field Audit<\/h3>\n\n\n\n

During a field audit, the roles are reversed \u2013 it\u2019s the IRS that will come knocking on your door instead of you coming to see them. The purpose, however, remains the same. Field audits are often the most stressful of the three types of audits. It\u2019s typically reserved for large taxpayers such as businesses, corporations, partnerships, entities, and trusts.<\/p>\n\n\n\n

Field Audit vs. Other Types<\/h4>\n\n\n\n

There are a few key differences with field audits. For one, the IRS isn\u2019t really limited to auditing the tax returns stated in the notice \u2013 most of your tax returns will be fair game. The IRS will also try to interview other people in addition to the owner or responsible officer<\/a>. Employees and even customers may be interviewed to get the full picture of the businesses’ finances and identify areas of underreporting. In order to minimize risk, you can set the date for your field audit during a time when you know that people will be out of the office. That way, you can control the narrative and prevent the auditor from talking to other people.<\/p>\n\n\n\n

Unreported Income & Inflated Deductions<\/h4>\n\n\n\n

A field auditor mainly looks for two things: unreported income and personal expenses masked as business deductions. For this reason, the auditor may ask customers about your business to identify whether you\u2019re really earning the amount you\u2019ve reported to the IRS. Conversations with employees during a business audit<\/a> may lead to similar discoveries; for example, a personal car deducted as a business vehicle.<\/p>\n\n\n\n

Alternative Location<\/h4>\n\n\n\n

If you\u2019re a small business owner, you can request to meet at the IRS office or your attorney’s office instead of your business if that location would effectively shut down your operations. You can hire a tax lawyer specifically for this purpose; a tax professional can request for the audit to be performed at their office rather than the taxpayer’s business.<\/p>\n\n\n\n

Even if the IRS agrees to meet at the office of your lawyer, you still can\u2019t prevent them from observing your business premises. As mentioned before, the IRS assigns well-trained agents for field audits and they will be on the lookout for anything that might cause suspicion. Photos of your expensive vacation, for example, can cause them to believe that you\u2019re under-reporting taxable income. For instance, they may want to see the equipment you\u2019ve claimed as business deductions. What you can do is to remove anything ostentatious that might cause suspicion in the IRS auditor\u2019s mind and make sure that you can account for the business deductions you\u2019ve claimed.<\/p>\n\n\n\n

Don\u2019t let the examiner tour the premises on their own. A casual remark from an employee can be detrimental, and some employees may welcome the opportunity to complicate your audit. Stay close to the auditor while they\u2019re visiting your business.<\/p>\n","protected":false},"excerpt":{"rendered":"

Tax Audit Attorney Jin KimFree Consultation(916) 299-9913Mon – Fri8 AM – 6 PM Tax audits are one of the most serious financial threats facing individuals and businesses. Few taxpayers can afford thousands of dollars in assessed taxes, interest, and penalties, so it’s important to put an experienced audit defense attorney on your side. Tax attorney […]<\/p>\n","protected":false},"author":1,"featured_media":0,"parent":0,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","footnotes":""},"yoast_head":"\nTax Audit Attorney | Law Office of Jin Kim<\/title>\n<meta name=\"description\" content=\"Sacramento audit defense lawyer Jin Kim presents facts to the IRS that align with a defense to assessed taxes, interest, and penalties.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/sacramentotaxlawyers.com\/audit\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Tax 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