Salt Lake City, Utah – Over the last few months I have blogged about the ERC and ERC mills that have been aggressively targeting taxpaying business owners. I have also blogged about tax audits and what does that mean if a taxpaying business owner has received the ERC. Today, I want to talk about the tax audit process.
Our office has been contacted by various taxpayers recently about the taxpayer receiving a tax audit letter from the IRS. If the taxpayer has received the ERC, it has been amazing to me to see the taxpayer panic. The panic comes from concerns about the ERC and the fact that the taxpayer did not use his or her regular accountant, but instead an ERC Mill. My standard line in these situations has been that the taxpayer will be okay if the taxpayer has kept good records.
Almost every taxpayer will be audited at least once in their lives. So, instead of being scared, be ready and provide to the IRS the documentation to support your IRS filing. So that you can better understand the audit process, here are the steps in the examination process:
- The taxpayer will receive a Notice of Selection for Examination.
- The IRS will send an Information Documents Request (“IDR”).
- Follow-up IDRs are not uncommon.
- The IRS will then send out a Report of Proposed Changes, if any, this is often called the “thirty-day” letter. If the taxpayer disagrees, the taxpayer then has thirty-days to file an appeal.
- Notice of Deficiency, or “ninety-day” letter. This notice informs the taxpayer that the taxpayer has ninety-days to file their case in the United States Tax Court.
I always advise clients to remember that the examiner is not your friend. In my experience, many examiners are trying to find reasons to adjust the return and generate more tax income for the IRS. This is frustrating since it has the appearance of the IRS shaking down the taxpayer for more money.
Tax problems are legal problems, and we solve both. If you or someone you know has an issue with paying their federal or state taxes and needs help to end their IRS nightmare, please contact Kent Brown at Strong & Hanni by either phone at (801) 532-7080 or email at: kbrown@strongandhanni.com or go to https://activerain.com/profile/kbrowndad for additional information, or my personal Strong & Hanni webpage at: https://strongandhanni.com/attorneys/attorney-kent-brown/
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