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IRS Audit Questions

Have you been subjected to an audit? Do you face penalties after having an audit and need to know what to do? Every year when people are preparing their taxes, one of the things that everyone tries to avoid is an audit. Many companies that do taxes advertise that they will stand behind the results and will help if an audit occurs. Other than the fear people feel when someone mentions an audit, how much one knows is usually limited. Experts online can provide you guidance and insights so you are prepared. Below are questions Experts have answered about IRS audits.

Is it possible for a return to go through an IRS audit more than once?

It is possible for a single return to go through an IRS audit more than one time, though the occurrence is rare. There is no law that expressly prohibits the IRS from performing numerous audits on one tax return, but they will have to have strong valid reasoning for doing so.

What are the IRS audit penalties?

The penalties that an individual can receive from an IRS audit will be dependent on the findings. However, if the audit does show that the individual owes taxes, they may incur interest and other monetary penalties from the date the taxes were due. There is a possibility that any penalties can be mitigated if just cause is able to be shown. For the most part an audit will not affect an individual’s credit score, unless the IRS has to file a lien to collect the debt.

Does the IRS investigation take place before or after the audit?

Actually in most cases the IRS will not do an outside investigation. The process usually requires the taxpayer who is being audited provides a fair portion of the documents that are requested. The auditor may also speak with employees if the taxpayer being audited is a business, or glance over the business’s documentation. An auditor may conduct an interview via mail or an interview with the taxpayer.

Does an individual have to attend the audit interview?

In most cases, an attorney or CPA agent is hired to remove the taxpayer from the middle of this audit. Therefore, the individual is not usually required to attend. Here is why:

  1. To force you to sit down with them, the IRS has to send you a summons requiring your appearance at an IRS office. Your IRS audit letter is not a summons – it is a letter, not a legal document, which simply requests that you meet with them and let the auditor interview you.
  2. Internal Revenue Code Section 7521(c) requires the IRS to conduct the interview with your representative, not you, if that is your preference (and in most every case, having a professional handle the interview for you should be your preference). You do not have to accompany your representative to the interview.

What happens if an individual disagrees with the outcome?

If an individual does not agree with the findings, then they need to contact the IRS, making them aware that they do not feel that the findings from the audit are correct. Then request an informal review. If an individual wants their results of the informal review quickly, they can call the number on the IRS audit letter and make a request for an informal review of the audit with the supervisor of the auditor who conducted the audit.

As seen in this article anyone is subject to an IRS audit. This is so the IRS knows the taxpayer has filed correctly and paying their taxes as they should. If your taxes or business has been audited and you have questions, knowing you have support from Experts will ease your mind. Legal Experts online will provide customized answers and insights to your unique situation. 

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