In a recent blog, I wrote about “The Taxpayer Bill of Rights” which you can link to here.
Those are general rights available to all taxpayers but there are also a set of specific rights that apply to a taxpayer whose tax return is subject to an examination or “audit”. In some cases these rights overlap and act as restrictions on what actions the IRS may take.
My firm, By The Book Taxes, located in Norwalk, CT specializes in income tax preparation for individuals, families and self-employed people. By The Book Taxes represents clients before the IRS and state taxing authorities to help them resolve their tax debts by preparing and filing Installment Payment Agreements, Offers-in-Compromise, Currently Not Collectible and Innocent or Injured Spouse applications. By The Book Taxes also represents clients in 1040 examinations or audits.
It is very important to restate this. The purpose of an IRS examination is not to punish a taxpayer or business but to ensure that the tax return filed is “substantially correct” with respect to reported income, business expenses deducted and tax credits claimed.
Here are some examples of taxpayer’s rights in an examination.
The Right to Be Free from Unnecessary Examination – one audit per tax year with some exceptions
No “Repetitive” Audits – if an item (like medical expenses) was audited in the last two tax years with no changes made to the tax return, then the IRS cannot keep auditing that expense item.
The Right to an Explanation of the Audit Process – In plain English, or any other language the taxpayer speaks along with information on appeal rights.
The Right to Be Represented – A taxpayer has the right to be represented by an Enrolled Agent (EA), Attorney or CPA authorized to practice before the IRS during an examination or interview once the practitioner has notified the IRS of the representation and submitted a completed Form 2848 (Power of Attorney) to the IRS.
The Right Not to Be Interviewed by the IRS – Let your representative do the talking. They understand the process and procedures.
The Right to Appeal an Examination Decision – A taxpayer has the right to appeal any examination decision as well as the right not to pay any proposed increase in tax until the appeal is heard.
If you have years of unfiled tax returns or owe money to the IRS, please call me before the IRS finds you. I can help.