Contact UsWhen you first start an IRS examination what are the most important steps to take that will help with the IRS Auditors?
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Tax Professional Answers
Kathryn Morgan
Hire a professional. Don't provide anymore information then you are asked for. Don't miss deadlines. Document everything including phone calls with time, date, employee name and ID number and substance of the conversation. Don't be afraid to ask to speak to someone up the chain. But first and foremost, hire a professional to do all this for you.
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556 weeks ago
Lesley Dmytrenko
Hire a professional that is both a CPA and an attorney. If at all possible have the agent perform their fieldwork at the professionals office, so as to limit their exposure to staff who could potentially provide information not requested by the agent. Set up an IRS approved secured designated email in order to send and receive IDR's and their responses more quickly. Give the agent only what they ask for, for example of the request an airplane log for executive flights give them only the executives piece of the flight log, not the entire log.
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556 weeks ago
David LaRochelle
I agree that you should hire a professional. However, in my humble opinion, I do not feel it necessary that that professional possess both a CPA and Bar license, unless the taxpayer is under criminal investigation. As a former agent, I have dealt with a number of tax professionals. A CPA in a small firm that handles both financial audits and tax preparation may not be as proficient in tax as a CPA in a large firm handling tax clients solely or an EA whose business is primarily preparing returns.
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554 weeks ago
Betty Williams
I would just add that in a criminal case, you would not likely want your attorney serving also as your CPA, you may need to retain a CPA under a Kovel Agreement.
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553 weeks ago
LINDA TRANTHAM
I agree, hire a tax professional.
It is very important you make sure your representative is communicating with the auditor, and you, on a regular basis. It is your job to supervise your representative and provide your representative with all supporting documentation when requested.
Make certain all appointments are kept, and that you arrive on time.
If you cannot support an item under audit, let the auditor know. Honesty is imperative.
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551 weeks ago
It is very important you make sure your representative is communicating with the auditor, and you, on a regular basis. It is your job to supervise your representative and provide your representative with all supporting documentation when requested.
Make certain all appointments are kept, and that you arrive on time.
If you cannot support an item under audit, let the auditor know. Honesty is imperative.
Charles Hays
I assume that you are a Tax Professional and not the Tax Payer. If you are the Tax Payer, the first thing to do is to hire an Enrolled Agent, a CPA that specializes sin taxes or a tax attorney. Kathryn's words of wisdom are very true and should be first on your agenda. If you are a Tax Professional, review the IRS Manual for the type of business your client is in. The Manual is the IRS ' audit guide and it will give you some ideas of what the auditor is looking for. The next thing I would do is review the Tax Payer's return using the manual to see where they could be vulnerable and advise the taxpayer so that there are no surprises during the audit...
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551 weeks ago
John Dundon, II EA
One common characteristic encountered in my practice particularly when a taxpayer chooses pro se representation in an IRS examination is how dumbfounded the taxpayer becomes when (s)he realizes (usually after the fact) that the IRS examiner was specifically trained to create a false sense of security in the personal interview or even on the phone - but usually in a cathartic repetitive nature - subsequently lulling the taxpayer into providing exam responses way beyond the scope of the audit creating opportunity for the Revenue Agent (RA) or Tax Compliance Officer (TCO) to potentially broaden the authority of the audit at hand.
IF you are not going to hire a pro, recognize that the IRS RA/TCO (Examiner) IS NOT YOUR FRIEND - no matter how 'connected' to the individual(s) involved you may grow to 'feel.' over time. Answer only questions asked and get the meeting or meetings concluded as efficiently as possible. Be cordial, no small talk. If they insist on conducting the meeting at your place of business provide seating or water only upon request but try first to get the venue changed to ANY PLACE THAT IS NOT YOUR PLACE OF BUSINESS OR YOUR HOUSE.
Once engaged the mantra that I always beat down on is to constantly remind the IRS RA or TCO that the same goal of efficiently closing the file at hand is shared by both sides AND THE BEST WAY TO DO THAT IS TO STICK WITH THE ISSUES AT HAND.
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550 weeks ago
IF you are not going to hire a pro, recognize that the IRS RA/TCO (Examiner) IS NOT YOUR FRIEND - no matter how 'connected' to the individual(s) involved you may grow to 'feel.' over time. Answer only questions asked and get the meeting or meetings concluded as efficiently as possible. Be cordial, no small talk. If they insist on conducting the meeting at your place of business provide seating or water only upon request but try first to get the venue changed to ANY PLACE THAT IS NOT YOUR PLACE OF BUSINESS OR YOUR HOUSE.
Once engaged the mantra that I always beat down on is to constantly remind the IRS RA or TCO that the same goal of efficiently closing the file at hand is shared by both sides AND THE BEST WAY TO DO THAT IS TO STICK WITH THE ISSUES AT HAND.