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Tax Audits: What You Need to Know

By Alexander Kugelman | June 25, 2020

Tax Audits
Our Team of Former IRS and U.S. Tax Court Attorneys Guides Clients Through the Administrative Process for an Efficient Resolution

Taxpayers facing a tax audit are confronted with the first step in a stressful journey through examination, appeals, and possibly litigation. Our team of former IRS and U.S. Tax Court attorneys guides clients through the administrative process for an efficient resolution.

The IRS starts an audit or examination by mailing an exam notice to the taxpayer. The exam notice provides taxpayers with crucial information related to the audit, including the subject, the scope, the severity and the type of auditor.

The notice will request the taxpayer to call the IRS auditor within ten days. A savvy taxpayer may elect to have a representative contact the IRS on their behalf. While this call is to schedule the first audit meeting, auditors often try to elicit information in this call.

At this point, the IRS formally requests documents by issuing a Form 4564, Information Document Request (IDR). A taxpayer needs to collect all documentation relevant and responsive to the audited items. It’s crucial to keep in mind that the IRS may request documents that exceed the audit’s relevant scope. The taxpayer needs to organize relevant documents and determine what information is missing.

At the first audit meeting the auditor begins with a script of open-ended questions designed to elicit further issues. The audit then proceeds into the items identified and review of documents. Ultimately the taxpayer has the burden of proving, or substantiating, the amounts reported on the tax return. If not, the IRS will use the omission of documents to support its determination. Furthermore, the auditor may formally expand the audit to other tax years or items.

After additional meetings and communications the auditor will issue an exam report proposing additional tax, penalties, and interest. A taxpayer should evaluate the auditor’s factual conclusions and legal reasoning. At this point the taxpayer can (and probably should) challenge the exam report by requesting an appeal.

Our experienced team can help throughout the entire process.

  • First, we assess the scope of the audit with the primary goal to keep the audit to that scope.
  • Second, we assess your records and help rebuild any that are missing.
  • Third, we contact the IRS on your behalf and take the lead at all audit meetings and communications. Often, our clients never meet or talk with the IRS.
  • Finally, we assess the audit report and advise on the most efficient way to move forward.

Kugelman Law attorneys Alexander Kugelman and Mindy Meigs have worked as a U.S. Tax Court clerk and IRS Chief Counsel attorney, respectively, so they are uniquely skilled at handling tax audits. Contact us today for your tax audit consultation.

Client Reviews
★★★★★
Alexander helped me break down my tax situation and used his expertise to figure out the next actionable steps, make sure that all the bases were covered (that I wasn't aware even existed), and confirm that things were done correctly. If you are confused and stuck in a difficult tax situation, Alexander will guide you forward and help you confidently resolve the issue. Henry Wang
★★★★★
If you are having tax trouble, Alexander is the one to help you. He was very professional, personable, and easy to reach. His explanation of the entire process is helpful for easing the stress that is associated with tax trouble. We never felt intimidated or out of the loop while working with him. The process was handled to our liking and we are satisfied with the results. Even the after care has been phenomenal! Tony W.
★★★★★
If anyone out there is in need of stellar legal tax assistance, look no further and contact Alexander Kugelman. He helped me tremendously with my tax situation and is always there to help when needed. If I can give Alexander more stars, I would because 5 stars is not enough! Thank you for everything, Alex!!! Flo Lauzon
★★★★★
Alexander has been a life saver! I got dragged into some serious IRS issues with a complicated foreign assignment component, which included divorce. Alexander has been working with me to resolve directly with the IRS. Alexander is detail oriented, responsive and I trust him to guide me. I will be using Alexander for all tax related matters from now on! He is stuck with me forever. Eve T.
★★★★★
Alexander helped me understand the IRS audit process and prepared my response. There were certain records that I had lost, but he suggested alternatives that the IRS accepted. Even better, he showed up at the audit for me and I never actually had to talk with the IRS. I didn't have to pay any penalties. I'd definitely recommend hiring Alexander to deal with an IRS issue. L.R.