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What exactly is an IRS audit?
Taxpayers countrywide are anxious and terrified of getting audited by the IRS – for very good reasons. After all, during an audit the IRS makes every effort, non-stop, to confirm all of the numbers and detailed sums that you’ve put on your tax return(s). Almost all taxpayers can’t help but to become confused and disoriented when it comes to an invasive IRS audit. Most individuals are unsure of what an audit actually is and what may be involved. An audit is defined as an, “official examination and verification of accounts and records, especially of financial accounts,” but there’s much more to it than that. We’ve outlined some important details about the actual IRS process below for your consideration.
Three types of IRS auditing methods
• Office Audit – You're asked to appear at an IRS office
• Field Audit – The IRS auditor(s) make announced or surprise visits to you
Are there reasons why you shouldn’t try handling an audit yourself?
IRS audit agents are lethally experienced in interrogating taxpayers. They are considered the hardheaded ‘detectives’ of the IRS. It starts out with a modest IRS audit letter or perhaps just a call asking you to discuss something as benign as your deductions. You’re then summoned to the IRS office and so thinking that you may answer just a few simple questions about your deductions and get yourself out of trouble, you go unrepresented.
Usually, the agent positions you in their tiny cubicle which many people describe as an “interrogation room.” Some IRS agents will begin speaking to you in a nice, warm manner. Without fail, he/she then starts to become deliberately aggressive and slowly scrutinizes your tax returns and many other documents. In most cases, they have you believe you are being questioned about deductions for one tax year but then they widen the scope of the audit and start fishing for information and details pertaining to other years whether or not you’re prepared . In short, you will eventually come to realize that you are in ‘over your head’ and find yourself in a dizzying nightmare with very real ramifications.
In 98% of all audit cases, the agent will send you a document requesting bank statements, canceled checks, deposits, receipts, driving logs, utility bills and home office expenses promptly after your first meeting. Most taxpayers are willing to send the agent all of the documents they’ve requested. However, if at this point you mistakenly haven’t obtained experienced representation like JG Tax Group offers – it’s overdue – the time is right now. You require a tax relief expert to review those documents requested before you ever send them. The IRS is only entitled to certain information – if you send in all the documents they’ve asked for, it can hurt you considerably in the long run.
In some cases, an IRS agent may ask to visit you at your home. This may seem like an easier, more friendly and convenient approach. Nevertheless, you must keep in mind that the IRS’s motives are to obtain as much information about you as possible. They are simply trying to quantify what assets you have inside and outside your house. If you claimed to only make $20,000 a year but have nice furniture with original art on the walls, a Mercedes in your driveway or a boat in your backyard, the IRS will suspect that you have far more income than you’ve reported on your tax return(s). Ultimately, you don’t want an IRS agent at your residence – even if you’re confident that you have nothing to hide or fear!
There are several reasons why you should never handle an IRS audit on your own. You must understand that the IRS always has an exceptionally unfair advantage, due to the fact that the average taxpayer lacks adequate knowledge of tax laws to suitably defend themselves against the IRS. We’ve included a prime example of an actual client JG Tax Group represented where the IRS agent took complete advantage of the taxpayer’s situation and unfamiliarity with tax laws and federal procedures. As you may see in this Audit letter that we sent to the IRS agent, we took the initiative and confronted the agent about multiple mistakes he had made regarding our client’s IRS tax audit.