No one sets out filing their personal or business taxes thinking that they will face an audit. Even if you are cautious and only write off what you can, you may still find yourself subjected to an audit one day.
Dealing with the Internal Revenue Service (IRS) can be daunting. As a consumer, you are easily intimidated by this agency because you know that they can garnish your wages or even place liens on your property if you were to fall behind on taxes.
Any time you are dealing with an IRS audit, it is advised you at least consult with a tax attorney. A tax attorney can alleviate some (hopefully all) of the stress that comes from an audit, minimize penalties, and help you get through the process quickly.
Here Is Why You Should Consult a Jersey City Tax Attorney
At first glance, an audit might not seem like anything scary. You have done nothing wrong, so you assume that if you hand over the necessary documentation and go through the process, the IRS will let you go without a dime owed.
Believe it or not, the IRS can select audits at random – not just because you have made mistakes. Other times, the IRS finds errors in your tax return or information left out that they call into question. Deciding whether or not you should incur the cost of a tax attorney is up to you, but here are some reasons it might be beneficial to do so:
An Attorney Brings the Ability to Litigate
If you were to hire a CPA, you do not have someone that can litigate like a tax attorney. If there is a chance your audit might go to court, you need someone by your side to negotiate with the IRS and represent your case in court (if it proceeds that far).
Confidentiality with Your Private Information
You are guaranteed privacy when you deal with a tax attorney because of the attorney-client privilege. Most communications and personal information you share with your lawyer is strictly confidential and cannot be shared without your explicit consent. CPAs are not held to the same confidentiality standards. Instead, they are limited to tax matters only, and the IRS can subpoena them to testify against you – while the IRS would never request that your attorney testifies.
Knowledge and Experience Handling Audits and Negotiations
The tax attorney you hire will know state and federal tax codes and their regulations. They know how to deal with the legal complexities that arise from personal and business audits. Furthermore, they have years of experience dealing with IRS agents and helping clients through the audit process. They know what strategies they can use to defend you, how to explain irregularities, and how to get their clients the best results possible.
Attorneys Fight for You
An attorney is trained to negotiate and fight for their client, while an accountant is trained to comply. Therefore, if you disagree with the findings from the IRS, your CPA might be more inclined to comply with IRS requests and only argue against something if you have the usual proof. For example, the IRS fights your mileage write-offs on your tax return. Your CPA would only argue against them if you had receipts proving you purchased the gas or you were on a business-related trip. An attorney uses other evidence to demonstrate that your write-offs are legitimate, including emails, your calendar, and evidence from other professionals in similar industries to justify your mileage.
Defending You from Tax Evasion and Tax Fraud Charges
In severe cases, the IRS might accuse someone of tax fraud or evasion. You would receive a notification from the IRS stating that your taxes have massive mistakes, the IRS suspects that you have hidden funds, or that you have not been filing your taxes.
Note, missing a tax return does not automatically provoke the IRS into alleging you have committed tax fraud. Instead, you would receive a notification from the IRS about your missing return, and you can promptly correct it.
If you were to ignore the notices (which come in multiple forms over the course of a few months), then the IRS may begin the process of collecting evidence against you. Other times, the IRS will use their information to assume your income and taxes due for that year. In that case, you would receive a notification of the amount due based on their calculations – which is often much more than you would have paid if you filed taxes yourself.
Better Outcomes Overall
One of the biggest reasons you should hire a tax attorney for an audit is the outcome. A tax attorney will protect you from criminal tax charges and help you explore your options. You may be able to submit an Offer in Compromise or negotiate the amount due so that you are not paying too much in past due taxes.
Your attorney is realistic, and while they cannot remove all tax penalties, they can work with the IRS to ensure that you get a favorable outcome.
Are You Being Audited by the IRS?
IRS audits can be stressful, but they do not have to disrupt your entire life. If you have received a notification from the IRS about a pending audit, you can contact a tax attorney in your area to explore your options.
As a tax attorney in the New Jersey area, I can help you with your business or personal audit situation. I represent clients in their IRS and New Jersey statute audits.
Do not ignore the requests from the IRS or state tax commission. Instead, schedule a consultation with my office so that we can go over your options and get started. The sooner you get an attorney involved, the better the outcome.
Schedule your consultation at Paladini Law today. All consultations are confidential. Call 201-381-4472 to get started.