Being selected for an IRS audit can be the most stressful experience. The key to reduce your anxiety is to get professional help in the form of a tax attorney. Having professional representation will help relieve the questions and what-if scenarios that go through your brain.

In my previous post about IRS Audit Facts, I discussed how the IRS will contact you, what happens when you file an amended tax return while you’re being audited, and the reasons why your tax return was selected for audit.

In IRS Audit Facts: Part II we will expand on the IRS audit facts. We will discuss how long you should keep your tax returns, what happens when the tax audit is concluded, how far can the IRS go to audit your return, and what to do if you’re not ready for your audit appointment.

The IRS can audit tax returns filed within the last three years. If substantial errors are discovered, the IRS has the discretion to go back further. In almost all cases, the IRS will never go back more than six years. This answers the next question you might ask, how long should you keep copies of your tax returns? Optimally, you should keep copies forever. At the very minimum, six years of tax return copies will suffice.

When the IRS has been completed by the examining auditor it will be reviewed by the case manager. It is IRS policy that all audits are reviewed by managers. If errors are found during the review, the auditor will contact you and advise you what the correction is and what the implications of the error are.

What happens if you’re not ready for your scheduled appointment? First and foremost, don’t panic. Contact your IRS auditor at the number provided on the IRS notification letter. Explain the situation, and let them know what information, if any, is currently not available. In some cases it may be possible for the IRS to proceed. In any case, the IRS auditor will try to work with you to set up another audit appointment.

If there were only one audit fact that I could stress, it would be to hire a tax attorney or other tax professional to represent you. That’s a fact!

source: irs.gov

Its unfortunate that many taxpayers who owe federal income tax or have tax problems avoid consulting with a tax attorney. When you have a legal problem – you see a lawyer and when you’re sick – you see a doctor. So why is that many of you would rather stick your head in the sand and wait for the IRS to knock on their door than to consult with a tax attorney?

I guess one of the reasons is you’re not aware of the benefits of a tax attorney; maybe it’s because you feel it will cost you a fortune or maybe you just don’t know that a tax attorney is your best ally against the IRS.

Regardles of the reason you have avoided consulting a tax attorney, its time to change and seek tax help. Tax attorneys are schooled in knowing U.S. tax laws, representing you in IRS cases, providing you your legal options, help you restructure your finances to alleviate future tax debts. Perhaps the biggest benefit you can get from consulting a tax attorney is peace of mind.

What you need to understand about a consultation with a tax lawyer is that it is just a consultation. You are not obligated to hire the professional. Tax attorneys work like other lawyers, you pay for a consultation and go from there.

If you owe back taxes or haven’t filed federal income tax statements, the worst thing you can do is to continue to avoid them. It will cost you in the long run. In fact, it could cost you more than money, in extreme cases it could cost you time in jail.

Now that the tax season is official underway, I thought it’d be a good time to give a little advise on what to avoid when looking for a tax preparer.  Here are 5 of the top reasons to avoid choosing a tax preparer:

1.  Make certain to avoid tax preparers who claim they can obtain larger refunds or guarantee refunds. Also be careful to avoid any tax preparer who base their fees on a percentage of the refund. 

2. You want to avoid any tax preparer who completely closes their offices immediately after tax day, April 15th, every year.  If there is any doubt in your mind, speak to a trusted friend. A personal reference is a better way than choosing one blindly.

3. Absolutely avoid any tax preparer who try to persuade you to say something on your tax return that is not true, regardless if you will get a bigger refund.  Although the tax preparer completes your forms, you are ultimately responsible and will be held liable for your federal income tax return.

4. Never, ever choose a tax preparer that asks you to sign a blank return or requires the refund be sent directly to them. This should automatically send up a red flag as a possible scam.

5. You want to avoid a tax preparer who pressures you into buying additional products and services.

Other Notes:
Make sure your preparer fully explains every form you are asked to sign. In addition, ask your preparer about the use and disclosure of your personal tax return information.  The information on your tax form is sensitive, and in the wrong hands, could lead to identify theft – and then you will be confronted with a whole load of very serious problems.

In closing, use your common sense.  If you don’t feel completely comfortable with your tax preparer, find someone else.  And when in doubt, talk to a trusted friend for a personal recommendation.

Well, what are you waiting for, April 15th is not that far away!