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Philadelphia Tax Attorney for IRS Audits and Examinations

An IRS audit and an examination are the same thing. The IRS refers to an investigation into the numbers in a tax return as an examination. These examinations audit the records a taxpayer presents in support of his or her tax return.

What to Do Before an IRS Examination: Do I Need an Attorney?

If you are facing an IRS examination, we strongly suggest that you contact our office as soon as possible. With over 30 years' experience handling IRS matters, Philadelphia tax lawyer Joseph Viola can help you prepare for your examination and accompany you to ensure the greatest chance of success. In many cases, he can attend the audit on your behalf without the need for your presence, although this should generally be a strategic decision rather than one motivated solely by anxiety.

The IRS orders examinations to obtain more information than a tax return provides; the goal is to determine the legitimacy of the income and deductions reported. The information on the return is, for the most part, literally all the IRS knows about the taxpayer. The goal for you and your lawyer, therefore, is to provide relevant information and cast it in the most favorable light. Usually this is best done by your full participation in preparing for the examination according to the advice of your lawyer.

If you regularly employ a CPA or ordinary accountant to prepare your tax returns, this individual may offer to accompany you to the audit in order to defend the figures stated in the returns. But note that he or she may have returned the documentation used to prepare the returns during the considerable gap in time (often more than a year, but usually less than two years) between the filing of the returns and notification of the scheduling of an IRS examination. Depending on the level of sophistication of the tax return preparer, it may be acceptable to rely on him or her to assist with the audit. It has been our experience, however, that many tax return preparers are unwilling to get involved. And those who do may be significantly limited in representing the taxpayer's interests, to the extent those interests are at odds with the preparer's own concerns for protecting his or her own financial interests.

What Happens During an IRS Examination: Do I Have to Be Present, or Can My Attorney Represent Me?

The most troublesome trend in recent years in examinations conducted in the Philadelphia and surrounding suburban IRS offices is the examiner's insistence on a lengthy, detailed and wide-ranging interrogation of the taxpayer at the beginning of the examination. Obviously, the more personal information the examiner can elicit, the greater the likelihood the examiner can search for more errors and omissions in the taxpayer's return — often far beyond whatever questionable items prompted the selection of the taxpayer's returns for audit in the first place. This practice in itself is sufficient reason to retain a tax professional to prepare for and attend the audit in place of the taxpayer. This is true no matter how confident the taxpayer feels about his or her level of honesty in tax matters generally or the correctness of the returns being audited in particular.

The IRS examiners, as a rule, do not favor having the attorney present instead of the taxpayer: this ties their hands and forces them to work harder. Nevertheless, where the tax attorney is in a position to answer all relevant questions, the IRS has no cause for complaint. In some instances, such as where the taxpayer operates a small business and/or uses a portion of his or her residence exclusively for business purposes, the IRS examiner will insist on an on-site inspection, which may for practical reasons require the taxpayer's limited participation

What Happens After an Initial IRS Examination?

Too often people go into their examinations without the necessary information to support the claims on their tax return. If your initial examination did not go well, and you have been given a "laundry list" of items to produce and a deadline for compliance, we can plead your case to the IRS. We will get to know your side of the story. We will learn all of the relevant facts of your situation and, if at all possible, build a compelling case that we will present to the IRS while the matter is still at the examination stage. All of this must be undertaken as soon as possible after the initial meeting because the examiner is under pressure from his or her manager to close the case, and because opportunities for meaningful consideration are limited.

Even if your record-keeping has been less than adequate for IRS purposes or your return contains errors or items you cannot support, it may be possible to submit the equivalent of an "amended return" during the audit, which increases deductions or claims new deductions you may have missed. A self-prepared return might even have contained errors in your favor that you can now correct to partially balance the unfavorable errors flagged by the IRS in the examination selection process.

Contact a Philadelphia Tax Lawyer

Need Advice About an Audit? We Can Help.

If you are facing an IRS audit or recently received a decision from the examiner, contact us for a consultation. Depending on the ultimate determination of the IRS examiner, Philadelphia tax attorney Joseph R. Viola can also represent you in your administrative appeals or negotiate on your behalf an IRS payment plan or offer in compromise. He also has experience representing audited clients in subsequent criminal tax proceedings or court appeals of unjust tax liabilities.

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