Most taxpayers feel like the world is caving in the moment they receive an audit letter in the mailbox, but once the panic and fear is pushed aside, it is time to determine what the audit is, and what an IRS audit actually is, and what it actually means.
Is the situation serious enough to hire an attorney? This is the question that is in the back of your head when you are considering hiring an audit attorney. This is true for most people, and while you are being audited, you are under no obligation to retain legal counsel. This is true of most audits. But, for some audit scenarios, legal counsel is not something to simply set aside. This is something that is actually very real and needs to be considered very seriously.
When Lawyers Are Not Needed
Most of the time, you probably will not need to reach out to a lawyer for low-level audits. Missing documentation and other small issues are something that is not very serious and the case will not warrant the use of a lawyer. Audits like these are very common and are the type of situation that people handle by hiring a CPA. Examples of these types of audits are ones where no "funny business" is happening and the audit in question is even for a small dollar amount.
When to Hire a Lawyer
If the IRS audit is for multiple years and seems to include at least one large questionable financial figure, a tax lawyer needs to be retained. Even more so, if the IRS is concerned with the income you reported, the deductions you claimed, or if fraud is suspected. A lawyer is needed to protect your interests, so you don't end up divulging corrupting information to the IRS.
Tax Lawyer Benefits
When a lawyer is retained, the benefit of communicating about the case confidentially and without fear of any third-party disclosure through attorney-client privilege is enjoyed. Not to mention, tax lawyers have the experience to maneuver IRS policies and for negotiating a reduction on the penalties, interest, or even extra tax due. If the audit is worse and it leads to an appeal or court case, for the entire process a lawyer can defend you.
IRS audit coming up? Never face it without proper defending attorneys who can help you with your right, protect your rights and help with putting the IRS to negotiation to help with penalties reduction.
