McMahon & Tivnan, PC, specializes in representing taxpayers in tax examinations by the IRS and state tax authorities, including audits, concerning foreign assets and transactions. Our firm only practices federal and state tax controversy and our years of IRS experience ensures you are working with an expert team. With over 100 years of combined experience with the government and in private practice, our lawyers know how to investigate and defend against IRS and state tax audits. Our attorneys represent individuals, estates, and business entities facing federal and state tax examinations in the following areas:
- Income tax examinations concerning business and foreign income reporting;
- Employment tax and responsible person determinations of personal liability;
- Estate tax examinations concerning valuation disputes and numerous tax savings strategies
- State sales and meals tax examinations; and also
- Voluntary Disclosure may be possible to reduce penalties and fix past errors for taxes not under examination.
What to Expect During an Audit
If you are facing an IRS tax audit, it’s essential to understand what you are facing. The IRS has the authority to thoroughly investigate your financial transactions to verify your return. Although an examination is civil law enforcement procedure, the IRS and Department of Revenue can recommend criminal charges if it finds evidence of willful misstatements on a return. However, you have rights too. The first and most important is to have a knowledgeable and experienced tax attorney represent you, negotiate on your behalf, and present your case. Never talk to any IRS agent without legal counsel. You risk needlessly volunteering information that could cost you money and possibly lengthen your examination.
Not all tax professionals are the same. Even if you used a professional return preparer, the process of defending a return requires more. Our team not only understands tax returns, we also understand the IRS examination process, the IRS Appeals process, as well as litigation options if necessary. We have achieved success for clients at each of these levels.
The Process of an Audit
The IRS does not reveal how it selects taxpayers for examination, but being selected for an audit usually indicates IRS suspects something on a return is inaccurate. Audits begin with a written Notice of Examination sent to the taxpayer. The IRS will never contact you by phone to notify you of an audit. Frequently the Notice will be accompanied by a request for documents and information about items on the return. Examinations may be conducted by correspondence, in the local IRS office, or at the taxpayer’s location (a “field audit”). The type of audit is an indication of how much time IRS believes may be required and the type of examination can change.
In most cases, the IRS can audit returns going back three years. However, in some cases, the IRS may look at additional years. Most audits cover the last two years of returns and rarely go back farther than six years. The length of time it takes to complete an audit depends on the facts of the case.
While the audit is ongoing, you have rights as spelled out in Publication 1, Your Rights as a Taxpayer.
- You have a right to professional and courteous treatment by everyone who works for the Internal Revenue Service.
- You have a right to the privacy and confidentiality of your financial information.
- You have a right to know why the IRS is asking for any particular piece of information, how it will be used, and the consequence if you do not provide it.
- You have the right to have legal representation. Attorneys have unlimited representation rights in matters involving the IRS.
- You have the right to appeal IRS decisions in court.
When it’s time to close out the audit, the IRS will issue one of three decisions:
- No change: All of the questions have been adequately and satisfactorily addressed, so no changes are necessary.
- Agreed: The IRS proposes changes to your return, and you and your attorney agree. You sign a report to indicate your agreement.
- Disagreed: The IRS proposes changes to your return, but you disagree. You can request a conference with an IRS manager, participate in mediation, or file an appeal.
Why Choose McMahon & Tivnan Tax Attorneys for Help With Your Audit
At McMahon & Tivnan, our team of attorneys knows how to prepare and present your case to the IRS. We zealously advocate for our clients in negotiations and litigation with IRS and achieve the best resolutions possible. Contact us today or call 617.600.5400 so that we can help protect your rights during this stressful process.