Types of Tax Audits that Our Law Firm Assists With
Every audit is unique to the taxpayer’s individual returns and may take place in person or through the mail, depending upon the situation. There are some common rules on how to explain your case to us most effectively.
Tax Audits Format
- Correspondence audit: Correspondence audits are the lowest level of audit. In a correspondence audit, you are mailed questions about your returns and requests for additional documents. Then you provide the additional documentation and answer IRS questions to support your returns via mail.
- In-person interview: You meet in person with IRS auditors, either at an IRS field office or at your home or business. You will need to bring with you to the audit specific documents and information for the auditor to review. These are typically the most serious types of audits that tax audit lawyers assist with.
IRS Tax Audit Types
In addition to how tax audits are carried out, there are different IRS tax audit types, depending on what aspect of a return the IRS is examining. One example is an audit of deductions that businesses have taken to reduce their tax burdens. When the IRS audits an income tax return for deductions, it focuses on whether you have valid receipts for all your deductions. From the basic perspective, the IRS is looking for a stack of receipts that add up to the tax deduction taken on the income tax return. If you don’t have them, you could end up losing deductions and paying more in taxes. Receipts should always include notes on what they were for and how the purchased item or service related to your business.
NY Tax Audit
In a NY tax audit of a business, sales tax is often a focus. There is no denying that a sales tax audit is not a pleasant encounter with the New York State Tax Department. But our New York State tax audit attorney will seek to make it as stress free as possible by providing superior legal representation.
There are many types of audits, depending on your circumstances. Once we learn about your case in a free consultation, we can provide you with more details about how we will handle it. Our experienced IRS tax audit lawyer, Timothy S. Hart, is also a skilled New York state income tax audit attorney. No matter which tax authorities are auditing you and whether it is your individual or business taxes that are being audited, you can rely on us for conscientious and hardworking representation. Reach out today.
New York Tax Audit Lawyer Explains the Tax Audit Process
You will first learn your tax return has been selected for audit through written notice from the IRS. The notice will arrive via regular mail. Why was your return selected? There could have been a possible error identified or selection may even have been random. Being audited is not the same as being investigated for fraud. It does not mean IRS or State of NY tax authorities think you did anything wrong. The reason for audits is to help increase compliance and ultimately revenue if tax agencies find deductions were overstated, income was understated or there are other problems. A tax audit lawyer will ensure your rights are protected during the IRS audit process. If you have received notice of audit, reach out to our attorney right away.
Under the tax laws, the IRS (and New York state tax personnel) will also send to you a written request for specific tax documents needed for the audit. You should provide this information immediately, which can serve to speed up the entire audit process.
The moment you receive notice of an audit is the right moment to seek tax counsel. Our tax audit attorney will protect your legal rights.
You are not powerless in the midst of an IRS audit. You have important legal rights that our IRS tax audit attorney will ensure are protected. Remember, when you are going through an audit, you have the right to:
- Professional and courteous treatment from IRS employees
- Privacy and confidentiality about tax figures and matters
- Knowledge of the intent of IRS and information on how this data will be used
- Representation either by oneself or an attorney or other authorized tax professional
- Appeal in disagreements within the IRS and before the courts.
Do not be afraid of an IRS audit. This is a normal government function, and you have all the protection of the law to make sure that you will experience fairness and impartiality throughout the entire auditing process. Our IRS tax audit attorney will stand up for your rights and interests.
What Happens at the End of the Audit Process?
The auditors have examined your return and reviewed all the additional information you’ve provided. Now what? Basically, an income tax audit can end in one of three ways. You can have no change to the amount of taxes you owe, or a fully agreed case where both sides agree on the amount of taxes owed, or you may not agree on what you owe or whether you owe anything at all.
- No change – You will receive a letter telling you there is no change to what you owe, which means that after conducting the audit the IRS determined your return was correct.
- Fully agreed case – You and your attorney agree that you do owe an additional amount of tax; once you pay the negotiated amount, the audit is closed.
- Do not agree – This is when you are partially or fully in disagreement about what you owe or whether you owe anything. If this is the case, there is an appeals process. If that is unsuccessful, filing a petition with U.S. Tax Court may be a final option.
Tax Settlements
Attorney and CPA, Timothy S. Hart has worked up close and personally with many, many clients grappling with massive tax problems. He understands the stress, anxiety, and uncertainty a person feels when they get that letter or phone call from the IRS or New York Department of Taxation and Finance demanding payment of overdue taxes. With a skilled attorney at your side, you can take a deep breath, create a strategy, and find a way through to the other side. Consider these successes:
An Affordable Payment Plans
We represented a business owner before the New York State Department of Taxation because of a sales tax criminal investigation of his business. We were able to negotiate a payment plan of $1,500 a month to pay off the over $500,000.00 in sales taxes owed, with no criminal charges being filed. We represented an individual client and convinced the IRS to accept a monthly payment plan of $1,500 for their $810,800 tax debt, even though she owned a valuable real estate partnership interest. Lastly, for a client that owes the IRS $2,312,145, we were able to convince the IRS to accept a $3,163 monthly payment plan to pay off the tax debt.
Settlements with the IRS
Our tax law firm negotiates aggressively in a solution-focused manner to achieve account settlements with the IRS that are manageable. One of our clients, Jeff K. owed the IRS $1.789 million, and our tax problem lawyers were able to strike an agreement in which he could settle the debt by paying just over $351,000. Another client, Marino F. owed $189,100 in civil penalties related to unpaid payroll taxes and income taxes, and they settled for $79,273. Another elderly client, John M. whose wife had passed away found out that she did not pay the taxes owed on her income when they filed their joint income tax return. We were able to reduce the $128,466 IRS assessment to zero through filing an innocent spouse claim. With the same client, we were able to settle his Ohio tax debt of $10,700 for only $221. We have also been successful in having the IRS remove penalties assessed in numerous cases.
Settlements with the New York Department of Taxation
Our law firm has had tremendous success in negotiating on behalf of clients with the New York State Tax Department to settle old tax debts for a fraction of the amount due by utilizing their offer in compromise program. One client, Karen P. owed $430,000 in payroll taxes, and she settled the account for $70,000. Another client, Misha A. owed over $100,000 in unpaid sales tax from a failed business, and we were able to settle for $49,000 payable over 60 months. For another business client, Nite M. owed $850,000 in sales taxes and was able to settle the account for less than half that amount ($323,000 paid over 5 years) even though they are still in business and profitable. Lastly, in the case of another client, while married our client had a joint income tax debt of over $57,000. We convinced the New York State Tax Department she was an innocent spouse and lowered her liability to zero. Needless to say, these clients were pleased with these outcomes.
When it comes to tax law, it’s all about understanding the technicalities and finding ways to achieve solutions that clients can manage. Most clients want a resolution so they can move forward with their life, with less anxiety, but they’re scared and confused because the law is complicated and tax institutions can be intimidating. Our law firm will walk beside you every step of the way, providing reassurance, communication, guidance, and tangible solutions.
Our New York Tax Audit Lawyer Represents Clients in Appeals
The federal appeals process is called an IRS audit reconsideration. New York State also has an appeals process. For both federal and state taxes, there are specific circumstances in which the audit can be reconsidered or appealed and certain steps that must be followed in the reconsideration process. Timothy S. Hart can advise you about the possible appeals process for your situation. In the following, he provides answers to common questions that many people have about taxes and audits.
Because of the almost unlimited timeline of when tax records could potentially prove to be useful, it is always best to keep your tax records for life. Yes, it does sound like a long time — and it is — but it is even more painful trying to prove some fact to the IRS when you do not have the tax records available. Our attorney Timothy S. Hart represented a client who was audited in 2012 and was asked for tax documents going back to the 1980s. The client had saved the records and was able to produce them, resulting in our tax audit attorney’s winning the client’s case and saving them a lot of money.
There are also viable non-tax reasons to keep the records. The Form W-2 (your wage statement) can be used to verify that the Social Security Administration has the correct earnings records for you.
For a good explanation of how long to keep records, read IRS publication 552, “Record Keeping for Individuals.”
The IRS typically audits returns filed within the previous three years. They may go back six or more years if they find substantial issues. New York State follows the same general timeline for audits.
The IRS only notifies taxpayers of audit by mail. The notification letter may arrive by certified mail or regular mail. It will contain your full name spelled correctly and your social security number or tax identification number, and it has legitimate contact information for responding to the IRS.
You will not be notified of an audit over the telephone or in an email. If you receive notifications such as these saying you are being audited, it is almost certainly a scam. The scammer may try to use scare tactics to get you to pay them money right away. While being notified about a legitimate audit can provoke anxiety, the IRS and state tax authorities do not demand money over the telephone or via email and do not use scare tactics.
How long an audit takes depends upon the type of audit, reason for the audit and the complexity of the issues involved with individual returns. The availability of information requested in the audit can influence the time it takes, as can scheduling conflicts of the parties involved. If audits are appealed, that adds to the length of the process. The process may take just a few months or much longer, especially if tax authorities find relevant concerns that require them to go back to previous years’ returns.
Personalized Service from Our Tax Audit Attorney in Albany, NY, and NYC
When you hire our law firm to assist you with your IRS or New York State tax audit, you can count on skillful guidance and sound legal representation. You will work directly with Albany tax lawyer Timothy S. Hart, who has a comprehensive background in federal and state tax law cases and who is also a licensed Certified Public Accountant. Reach out to him at our Albany office at (518) 213-3445 or our New York City office at (917) 382-5142 to schedule a free consultation.
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Reasons Returns are Selected for Audits
An IRS audit normally happens when there are discrepancies on tax documents such as W-2s and 1099s. Tax returns may also be selected for audit when they are involved with transactions with other entities undergoing audit themselves. Sometimes returns are just randomly chosen through computer selection. An IRS audit does not always mean that there are errors in tax filings.
Returns may be randomly selected for audit. It doesn’t always mean there are errors in tax filings.
Also, if you file an amended return, this does not affect your chances of being selected for an IRS tax audit. But the amended return will have to undergo a renewed screening process, opening the possibility that your amended return may be chosen for an audit.
Timothy S Hart, the founding partner of the tax law firm of Timothy S. Hart Law Group, P.C. is both a New York Tax Lawyer & Certified Public Accountant. His area of expertise includes innovative solutions to solve your Internal Revenue Service and New York State tax problems, including tax settlements through the Federal and New York State offer in compromise programs, filing unfiled tax returns, voluntary disclosures, tax audits, and criminal investigations. [ 
