IRS Audit Representation by CPA Tax Professionals
IRS Audits are Survivable!
IRS audit notices frighten most tax payers. The tax professionals at Sterck Kulik O'Neill can help you survive an IRS audit. We have a lot experience helping clients complete audits with a minimal amount of disruption and stress.
Our CPAs know how to organize your return to show your position to best advantage. Before the scheduled IRS audit appointment we will work with you to clarify and justify those areas questioned. We will help you show an auditor the information requested in a straight-forward, factual manner.
When questioned numbers result from the taxpayer viewing tax rules in a way not initially understood by the auditor, we help present and argue for your responsible interpretation of the rules.
How CPA Tax Professionals Approach IRS Audits
We are determined, and we fight for our clients. However, we are not confrontational nor disrespectful to the auditors. We deliver your information to the IRS in a smooth and graceful way while avoiding landmines.
We believe that good audit planning and information organization allow you to go into an audit with the financial data, analysis, and backup information that will smooth the audit process. Appearing at the audit with exhibits such as vehicle logs and description of business meals speeds the resolution of the audit. We know what backup documentation is helpful and we can help you prepare it.
We have helped many clients survive audits that resulted in no change in taxes owed. By maintaining professional, cordial relationships with IRS auditors, we believe we minimize the pain and effort involved. We work with the auditor to build rapport in our shared goal of completing the work.
Of course, sometimes an audit uncovers client errors.
We also help clients when they have made mistakes in their tax returns. We work with clients to clarify the true tax situation and present the updated information to the auditor in a calm, factual way.
We have been successful in having penalties waived in some cases where the error was inadvertent, and we have minimized overall IRS tax bills.
Proper, professional damage control can keep you from paying more in penalties and interest.
We help clients to disclose the details of discovered errors. We know that cover-up attempts are wrong, illegal, and ultimately ineffective. Further, dissembling in one area may make an IRS auditor look more closely into other areas, increasing the cost of the audit and also exposing the taxpayer to more potential unwanted adjustments.
Sterck Kulik O'Neill can help you survive an audit when your return is spotless, when there are gray areas to discuss with the IRS, and when the return contains errors to correct.
IRS audits are generally restricted to returns filed in the past three years. Tax audits for the State of California can be done for returns for the past four years. A twist: when you file a timely return for the past calendar year, the statue-of-limitations clock doesn't start ticking until the filing due date, generally April 15th.
If you have not filed a return for a tax year, the statue-of-limitations clock doesn't start at all. For example, if you skip filing for the 2011 calendar year, the IRS could audit your 2011 taxes in 2021 or even 2051!
In practice, if you skip filing for a calendar year, the IRS will create a substitute return for you and they will bill you for the taxes they think you owe. Even if you pay that tax bill, you sill haven't legally filed a return for the year! The IRS can still audit you for that unfiled year at any time.
Also, if the IRS can prove that return was filed fraudulently, there is no statue of limitations. This means that the IRS cannot audit your four-year-old return for mistakes, but if they can prove that you committed fraud four years ago, they can audit the return for that year.
An Offer in Compromise will let you pay the IRS only pennies on the dollar, right?
You've heard commercials that suggest that you call a particular tax professional to find out if you qualify to pay the IRS only pennies on the dollar through an offer in compromise.
Those come-ons worry us because we know the rules for offers in compromise. We know that offers in compromise are not gifts offered by a magnanimous IRS.
The IRS agrees. They say, "Such promoters make money by inappropriately advising indebted taxpayers to file an application for an offer in compromise with the IRS, promising unrealistic results, even when the taxpayers do not meet the requirements of the program. This bad advice costs taxpayers money and time." (Read the complete IRS statement)
Offers in compromise are accepted according to rigid, formulaic rules. The IRS looks at the amount owed, your financial situation, and pretty much says "yes" or "no" based on preset criteria. And, the IRS is stingy!
We explore the possibility for offers in compromise when appropriate, and we have helped clients reach agreement with the IRS. But, we are realistic.
We don't want to trick stressed-out taxpayers into engaging us because they think we can magically reduce what they owe the IRS. For further information, read the IRS's instructions for making offers in compromise.
Another commercial claim by firms vying for your IRS audit business is that you must engage a tax attorney to keep your conversations about your taxes private. These ads make it sound like CPAs blab about their client's finances at parties and call the IRS to tell them where to look for questionable deductions.
In fact, Certified Public Accounts are ethically bound to keep their client's financial information private. Sterck Kulik O'Neill doesn't even provide the name of its clients to third parties without prior approval.
Only lawyers have attorney-client privilege. However, nearly none of the audit cases we encounter involve situations where privilege is needed to serve the client's interest.
In cases where criminal prosecution or litigation is possible, we will advise a client to provide us information only when an attorney is present. This has occurred only one time since 2000.
You very probably don't need to spend the extra money for the attorney-client privilege offered by a tax or criminal defense attorney.
Your privacy is safe with Sterck Kulik O'Neill.