Audit Tips

IRS: “Sorry, but it’s just easier and cheaper to audit the poor”

IRS Commisioner Charles Retting at the Capital on May 15, 2019

www.propublica.org

 

Disagree With The Change (Always)

Well, almost always. Why? Because they make mistakes. The calculation favors the IRS and is often wrong.

Ask For Audit Reconsideration

If you have new information that will support your position you can ask for an Audit Reconsideration from the Appeals Division.

Ask For An Installment Agreement

There are full payment installment agreements and partial pay, meaning the statue of limitation will expire before you pay the full amount.

Do An Offer In Compromise

An Offer in Compromise is a request to pay less than what they say you owe.

Warning, only 1 in 4 Offers are accepted. You must have limited ability to pay the full amount or there is doubt you owe the tax.

How To Take Your Case To Tax Court

After exhausting all ways to get the IRS to see your point of view, go to Tax Court. You can do this yourself. Before you actually go to court, you will be referred to the Office of Appeals. Often you can argue your point of view successfully with Appeals.

Never Pay A Penalty, Ask For Abatement

Always ask for an abatement of the penalty. If you haven’t had a history of IRS letters or changes, you are entitled to ar First Time penalty abatement. Or, they may change the penalty to a lower penalty fee.

Often a federal adjustment or audit will trigger a state additional tax. Pay the state first it’s smaller an at a higher interest rate (12% or 18% vs 5%). Asking for a rate reduction from 18% to 12% is often successful.

Get Help From A Professional

Enrolled Agents and some CPA’s and Attorneys can represent taxpayers before the IRS. Beware of the ads on television that offer tax help.