Do I Need to Hire an Attorney for an IRS Audit?

Posted on March 25, 2016

Every year the Internal Revenue Service audits about 1.4 million individual tax returns.

Generally speaking, the more income you report to the IRS the more likely you are to get audited. So, for those of us earning less than $1 million annually, the chances are slim that the IRS will audit your tax returns. That’s not to say that lower or middle income taxpayers don’t get audited, because they do. The IRS may flag your return for a number of reasons, including:

Incorrect math
Claiming too many charitable donations
Not reporting all income
Reporting too many business expenses
Claiming too many losses
Your return is related to another taxpayer undergoing an audit, such as a business partner or investor
Randomly generated audit selection

One of the most frequent questions we get at Patrick T. Sheehan and Associates is “Do I need a tax lawyer if I’m being audited?” The answer is an absolute yes! If you are the subject of an audit, the IRS will notify you by via an audit letter. After receiving an audit letter, it is essential that you contact a tax attorney immediately. While it is important that you meet all of the IRS’ stated deadlines, never speak to a representative of the IRS without first consulting an attorney.

What you say can be used against you in audit proceedings. If you attempt to go through an audit with the IRS without an attorney, it is likely that you could make things worse when it comes to the penalty phase of the audit.

Even though we highly recommend hiring a tax attorney for an IRS audit, if you should decide to go through the process alone, you still may have legal recourse. If you are hit with additional tax, penalties and interest, you may contest the audit through an IRS Appeal or in U.S. Tax Court. Again, we would highly recommend a tax attorney for the appeals process.

If you chose not to attend the audit at all or received poor representation, Patrick T. Sheehan and Associates will work on your behalf to obtain an audit reconsideration from the IRS. Through the reconsideration process, our attorneys will file the necessary documents to substantiate items in the audited return. It is possible the IRS may find in your favor and eliminate all or part of its previous tax penalties and interest.

Chicago tax attorney Patrick T. Sheehan and Associates have successfully represented hundreds of taxpayers through audits with the IRS. If you have received an IRS audit notification, contact us immediately.