{"id":1260,"date":"2018-09-21T06:21:58","date_gmt":"2018-09-21T10:21:58","guid":{"rendered":"https:\/\/www.harringtonlawassociates.com\/?p=1260"},"modified":"2018-10-11T15:24:08","modified_gmt":"2018-10-11T19:24:08","slug":"tax-controversy-part-ii-audit-2","status":"publish","type":"post","link":"https:\/\/myhlaw.com\/es\/tax-controversy-part-ii-audit-2\/","title":{"rendered":"Tax Controversy: Part II\u2014Audit"},"content":{"rendered":"

If you have managed to land on the IRS’ (or Department of Revenue’s) radar, and the agent is conducting an examination of your return, you are undoubtedly considering your options. \u00a0This article is intended to give you an idea of what to expect and some of the key considerations<\/a> along the way.<\/h2>\n

There are three main types of audit: Correspondence, Office, and Field.<\/p>\n

A \u00abcorrespondence\u00bb audit is conducted largely by mail. \u00a0This is the kind of examination used for most individual and small business taxpayers. \u00a0A correspondence audit is limited to issues that can be verified from records that can be forwarded to the examining agent.<\/p>\n

The agent will send you a letter requesting information or explaining how the return needs to be corrected. \u00a0If you agree with the agent’s analysis, you can just pay the difference and move on with your life. \u00a0Even if you disagree with the analysis, you may decide it’s not worth paying an accountant or attorney to fight and you will pay . . . and move on with your life.<\/p>\n

This article is aimed a helping those who disagree with the agent’s position–or are hoping<\/em>, at least, the agent is wrong– and who are not willing to just go ahead and pay.<\/p>\n

An \u00aboffice\u00bb audit is where the agent will request you meet with the agent at an IRS office. \u00a0You do not actually have to go in person. \u00a0Your accountant or lawyer <\/a>can appear on your behalf . . . and that would almost certainly be better.<\/p>\n

If you are asked to come to the agent’s office, there should be a description of the issue(s) under scrutiny and the documents the agent needs to review. \u00a0Essentially, the agent has doubts about the tax treatment in your return and will be looking for documentation to support your position. \u00a0If you do not have the documentation–or the information you have does not support your position–then, obviously, the agent will try to disallow your tax treatment and ask you to pay the difference.<\/p>\n

Field audits are reserved for the largest and most complex returns, usually those of large companies. \u00a0These taxpayers probably have a team of tax professionals and are not reading this article, so the focus here will be on the correspondence and office audits.<\/p>\n