FEDERAL (IRS) AND STATE

TAX CONTROVERSIES AND AUDITS 

The senerio may go something like this:  You file your tax return, pay the tax oblgation, and then you get a letter from the IRS or other state agency requesting some documentation, a limited face to face audit, or a full line by line audit.  In effect, you being asked to support or validate the information you have provided.  Afterall, when you file a return the assumption and the laws says that is what you owe.  To the penny.  Nothing more, nothing less.

Well, to ensure compliance, audits of varying sorts are conducted.  A govermental employee will attempt to validate what you have placed on the return.  If they reach the same conclusion you did -- then no issue.  Everyone moves on.  If they reach a different conclusion then you have a potential classic tax controversity.  That is, they believe you owe more in taxes than you do.  They also may believe this and not be supported by any facts or law.  What do you do?  How do your prepare for such event? 

We highly recommend unless it involves a small and simple manner that you seek professional representation.  On any tax representation--the only representation that gives some leverage is an Enrolled Agent, CPA, or an Attorney.  We do realize that technically the preparer can represnt you for the return that they have prepared in making such statement.  An Attorney, CPA, or an Enrolled Agent is worth the money spent when undergoing an audit but the matter may not end there and the individual representing you has to know the "big picture on all your options" beyond just the audit in resolving the matter.  Actually the truth is that the governmental employee likely does not wish to deal with you anyway for a variety of reasons (i.e., emotions, lack of knowledge, etc.)

At the conclusion of a any audit, you have some appeal rights available.  It varies by state (Texas being one) but at the federal level you can take the matter to IRS Appeals or a Federal Court (United States Tax Court, United States District Court, or Federal Claims Court) - See Court section in Tax Practice.  

You need effective representation to know your options and rights on these matters.  If you have an audit that is being conducted or have a potential tax controversity then please contact us and we would happy to consult with you on the matter. 


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