Who Is Best To Represent Me In a Tax Audit?
Why can’t I represent myself? Why can’t I have my tax preparer represent me? Can a relative who is professionally licensed as a CPA, or attorney, represent me?These are excellent questions that must be answered when you receive an audit notice. This is also true if you receive a correspondence letter from the IRS requesting additional documentation to support only a couple of items on your return! We offer audit help for written IRS audits.
What Will A Representative Do For Me?
A representative is supposed to decrease your exposure to adverse adjustments from the IRS auditor. You don’t want the IRS to probe into every possible area they can find. You don’t want them in your home. You don’t want to answer questions that will incriminate you or questions that will reveal things that the IRS doesn’t need to know to conduct the audit. An audit is not a Grand Jury investigation nor is it handled by the Criminal Investigation division of the IRS. Do you know how to conduct an audit? Is your tax preparer experienced in audit representation? Has your preparer adapted since president Obama took office and changed the game? We currently have many taxpayers we represent in audits. We can safely say that it’s a whole new ball game.A representative should know the difference between what evidence is acceptable as support and what is not. All attempts should be made to supply enough evidence so that the audit doesn’t result in the examiner checking the documents relating to other years.
A representative should be able to bargain with the auditor to accept certain documentation and to remove penalties if the taxpayer agrees to sign the audit report. We feel that we can make a big difference in your audit results by being the CPA firm you choose to represent you. Call us now for audit advice concerning individuals, corporations, partnerships, trusts, etc.
Types of Tax Audit Representation
If your company has an employee you want to represent you then you can designate them as your “power of attorney.” There are cases of limited power of attorney you can use as well. Mainly, there are three types of licensed individuals that can represent you before the IRS in a tax audit. I will discuss the pros and cons of each, but first let’s discuss the considerations that matter:How to Select an Audit Representative
- Trust - If you can speak to the person representing you, and you conclude that this is someone you trust, then hire them.
- Knowledge - Don’t hire someone without extensive education and knowledge in taxes. I’m talking about a college degree involving tax courses and not some non-accredited so called “National School of IRS Audit Reps”.
- Experience - Does this person do IRS audits almost daily, or is it only occasionally when their tax client is audited?
The Pros and Cons of Each License
Tax Attorneys
Pros - If the attorney meets the three criteria above and your situation requires tax court research, and other expertise in court procedure, then this may be a good choice for you.Cons - I have rarely met any attorneys who can be trusted to consider the clients interest above their own. In fact, they can abandon your case and the state bar will probably allow them to continue to practice. That has happened to us at least three times with attorneys we’ve hired in the past. Attorneys may not represent their accurately to you either.
Enrolled Agents
Pros - If they meet the 3 criteria above and they actually took and passed the enrolled agents exam then they will had had enough tax experience to handle your audit.Cons - Some collection agents of the IRS are given their enrolled agents license when they leave the service, without having taken the exam! The educational requirements to take the exam, and become a licensed, are far lower than to become a CPA or attorney. They may not operate as educated professionals, which can hurt your audit.
CPA’s (Certified Public Accountants)
Pros - Assuming they meet the 3 criteria above, they are the highest level of trusted professional. They have the education, the intelligence, and a conservative state board of accountants who watch over them like a hawk.Cons - Some CPA’s couldn’t fight their way out of a paper bag! I wouldn’t want them to represent me. Some of them may have tax esperience, but not the negotiation skills needed.
The best representative must have the courage and negotiation skills usually attributed to an attorney, the IRS knowledge and tax expertise that is part of the enrolled agents exame, and the education, knowledge, and ethics of a CPA. We feel we can offer that to you. Please contact us when seeking representation for your IRS tax audit.
