Keep a Close Watch on IRS Tax Audits Process

by David Johnson

Could you ever sense of a situation where anybody is authorized to prepare your federal tax return in handful US states? Even tax preparers without holding any type of license, certification or meeting any competency requirements can charge a fee for the service from you. With the emergence of the strict administration of IRS (Internal Revenue Service) now every paid tax prepares has to undergo necessary certification process. After 6 months of study on paid tax preparation services the new rule is not going to effective for tax payers from 2011.

United States federal government deploys their revenue service (IRS) to an agency, the bureau of Department of the Treasury supervised by the Commissioner of Internal Revenue. Every State can have their corresponding IRS system in vogue so need a state specific attorney in general. For example, to collect information on IRS in Maryland search for a Maryland lawyer would be an wise take.

Now if you are running a small business and pondering over for being audited by the Internal Revenue Service, truly your journey through out the procedure can be real tidy. While filing for tax returns IRS conduct investigations called "Audits". Preparing for audit and appealing for audit results too demand considerable amount of proficiency and time which might not get affordable for you. Let us see how the IRS audit get processed enabling you safeguard your business.

How IRS examine Tax returns:

Generally two procedures: Through computer program to identify the returns with incorrect amounts and from outside information sources like newspapers, public records and individuals

What type of audits you may undergo:

Whether it is an automatic computer generated or manual identification process, screeners will determine the type of examination for your tax return. For example, Campus Examinations and Area Office Examinations.

a) Campus Examinations:

The campus, one of the ten service centers in the country, generally handle simple issues that can be resolved by verification through mail. In this examination procedure tax payers are initially contacted through letter or telephone for proposed changes to the return. You will receive a 30 day letter and the notice of deficiency. You may respond by agreeing to the correction, requesting additional explanation, requesting a personal interview or not responding or not agreeing to the correction. If your provided information is satisfactory, the return will be accepted and you will get a no-change letter from IRS.

b) Area Office Examinations

You may be invited to bring books and records to a local IRS office to resolve any issues (Office examinations). Or else, the revenue agent will visit your home or business place to held the exam (Field Examinations)

How the Audit will be prepared?

Prior to filing your tax return you can do good record keeping during the tax year only. It can be real handy when IRS tax agent will ask your tax information. Here are some other get going suggestions for you:


* Hire a tax attorney or a certified public accountant to comprehend issues IRS is focusing on


* Review IRS Publication 1, the taxpayers' bill of rights, which will be brought with your audit notice


* Read the issues with IRS website


* If came across any difficulties consult with your tax preparers and ask him or her to accompany you during the audit.


* If facing trouble in assimilating tax records then don't hesitate to call off the audit.

Finally at the end of IRS tax audit, your IRS agent will notify you the problems with tax return. You will be advised to file a formal report if any tax adjustments needed. Expect to collect the complete examination report within 3 years of the time you filed the return.

About the Author
David Johnson is an eminent Tax preparer in Maryland. He spent more than 10 years with Maryland IRS tax audit preparation system and suggests visiting www.thorntaxlaw.com/ . You can share your business related tax return queries with him.