IRS Audit Attorney

With more than a decade of legal, business, and tax experience, the team at Milikowsky Tax Law is on hand to help defend your business in an IRS audit.

There are few things more threatening to a business owner than a letter from the IRS.

An audit can be a time-consuming process. While you cannot avoid a tax audit, you can minimize your risk of an audit by avoiding potential flags on their tax return. The most frequent IRS audits are caused by inconsistencies or errors in your tax return that raise red flags in the eyes of the IRS.

When you work with Milikowsky Tax Law, you get more than an experienced tax litigation attorney. You get an experienced business and tax advisor who can work with you to reduce your chances of being audited, with our comprehensive tax return assessment system and years of business experience.

California’s Top IRS Audit Attorney

Our leading tax litigation attorney, John Milikowsky, has decades of experience representing countless businesses in legal tax matters. Mr. Milikowsky is dedicated to relentlessly defending his clients in everything from state and federal tax audits to criminal tax investigations. As a full-service tax law firm, we frequently work with business owners to empower owners to identify issues on their own tax returns. While there is no way to guarantee you will avoid a tax audit, we can teach you to significantly minimize your risk of an audit.

Milikowsky Tax Law Defends Businesses in IRS Audits

When you’re faced with the formidable presence of a tax audit, don’t panic. Reach out to Milikowsky Tax Law, and we will protect your company to keep your business in business. Our skilled tax litigation attorneys will protect your rights every step of the way.

Whether you’ve just received a letter from the IRS, or you need help analyzing your legal rights and financial data reported on your tax returns, contact us today. The team at Milikowsky Tax Law is here to help.

San Diego Tax Attorney – Your Relentless Advocate in IRS Audits

Business owners may not be sure where to start if IRS audits their company. However, an IRS audit doesn’t have to overwhelm your life or impede your ability to conduct business. With the experienced team at Milikwosky Tax Law, you can navigate the process of an IRS audit secure in the knowledge that your tax attorneys are advocating for you every day.

There is little to no margin for error during an audit, a tight timetable, and potentially severe consequences for a poorly handled interaction with IRS. Unlike CPAs who do not have attorney-client privilege, attorneys are able to speak with your IRS officer on your behalf without risk of subpoena or summons of records discussed.  A qualified attorney can, review your documents with an expert eye, create the right strategy for you, represent you or your business, and provide valuable advice and guidance.

If you receive a letter from IRS confirming your business tax return has been selected for examination, review your return and identify the items that will likely be investigated so you can be prepared. Then, before communicating with IRS, reach out to an experienced IRS audit attorney. Having a game plan is critical. You want to be honest and prepared when speaking with your IRS revenue agent.

Anytime you file taxes, there is a chance that your tax return might be audited by the Internal Revenue Service (IRS). The agency conducts standard procedures to find any errors or discrepancies among taxpayers. The audit process is meticulous and, should you find yourself under the scrutiny of IRS, will require detailed information from you. 

In the article below, you’ll learn about the audit process and frequently asked questions surrounding IRS audits.

Why was I selected for an IRS Audit?

There are different reasons you may be flagged for IRS audits. Some are due to random checks; however, you have a low chance of being audited this way. Most taxpayers have less than a 0.6% chance of receiving a random audit check. 

IRS runs tax returns through its Discriminant Information Function (DIF) system to continually update their database and make sure they are tracking industry benchmarks for each industry and tax bracket. 

The DIF system also checks for incorrect tax filing information. Any discrepancies in tax forms, such as an imbalance of tax returns, a discrepancy between reported earnings and employer filings, or unreported cash transactions by one member of a transactional party, will trigger DIF to send your return to an IRS audit officer. 

People are more susceptible to an audit if they:

  • Earn less than $25,000 or more than $500,000
  • File incorrect or incomplete returns 
  • Have large numbers of cash transactions 
  • Claim a disproportionate number of deductions 
  • Are self-employed
  • Have a home-based business
  • Have a cash business 
  • Have foreign assets 

Sometimes you can be audited as a result of your business partners or investors going through an audit. 

How Will I Know If I am Selected for an Audit?

You will know if you are selected for an audit if you receive a verified letter in the mail from IRS. They do not call to notify you about your audit. 

What Do I Do If I’m selected for an Audit?

If you or your business are selected for an audit, make sure you read all of the information sent to you in your audit notification letter.  The letter and accompanying information request packet will notify you as to what entity is being audited (business or personal) what year(s) are under review and who your auditor is. Once you know what IRS needs, make sure you collect all of the records and supporting documentation requested (but nothing additional). You will need to submit records from banks, vendors, and businesses you have worked with, invoices and pay stubs, payroll records, and medical expenses among other information.

Should I Hire an IRS Tax Attorney to Help Me?

We suggest contacting a qualified tax attorney to help guide you through your audit, to ensure you are timely, responsive, compliant, and do not unintentionally increase the scope of your audit to other areas of your business or personal finances that would otherwise remain unscrutinized.. There is little to no margin for error during an audit, a tight timetable, and potentially severe consequences to a poorly handled interaction with IRS. Unlike CPAs who do not have attorney-client privilege, attorneys are able to speak with your IRS officer on your behalf without risk of subpoena or summons of records discussed.  A qualified attorney can, review your documents with an expert eye, create the right strategy for you, represent you or your business, and provide valuable advice and guidance. 

How long do I have to reply to an IRS audit?

You have 30 days to reply to the initial audit letter. Do not hesitate, and make sure you take the appropriate steps early on. IRS is not likely to provide extensions unless you have a good reason.  Your attorney can help by advocating for more time with the IRS agent.  A good attorney will know many of your local IRS auditors and have strong relationships built on well-structured prior cases and mutual respect. 

How Long Do Audits Take?

The time it takes to conduct an audit depends on the case. It fluctuates depending on:

  • The seriousness of the tax reporting error
  • When and whether the right information is provided to IRS
  • Communication between the person being audited and IRS officer

How Many Years of Tax Returns Can IRS audit?

IRS audits tax returns from the past three years; however, most are from the past two years. Only when IRS agents find discrepancies within the audit they are conducting do they dig for information older than three years. Most audits do not look for information past six years. Though in cases of criminal audits IRS can look back 9 years and longer. 

If you or someone you know received an audit letter from IRS, reach out to our expert team at Milikowsky Tax Law. We have over a decade of experience working with IRS and tax audits and are experts in defending business owners in the face of IRS or other government agency audits. 

woman with a lot of paper work

If you recently received a letter from IRS, there are a few important steps you need to take to protect yourself.

The first step is to contact a qualified IRS Tax Lawyer.

While IRS will occasionally audit businesses randomly, they usually audit an individual or business because your tax return contains an error or a transaction that is inconsistent with other businesses in your industry. Our San Diego IRS attorney explains what steps you should take to ensure you are protected.

Once you receive a notice that IRS intends to audit you, here are a few things you need to do:

  • Find Out What Part of Your Tax Return Is Being Audited.
    Many times, IRS will only question certain sections of your tax return, such as how you calculated and reported your gross income. This is especially true of self-employed individuals or business owners who are majority owners.
  • Gather Your Documents To Prove Items on Your Tax Return.
    Once you know the reason that triggered your audit, you need to be able to provide documents to verify your income, expenses, or other transactions reported on your tax return. There are alternative methods to establish your position if you lack direct proof; however, it is important to reach out to your vendors, banks, and other individuals and businesses who have records that are useful in your audit. Banks generally retain your records (i.e. bank statements, canceled checks, etc) for seven years. Businesses that you have done business with generally keep transaction records for 3 years.
  • Don’t Ignore the IRS
    While you may be tempted to ignore the IRS’ attempt to reach out to you, not responding by the specified deadline will make matters worse. If you do not respond to an audit notice, the IRS will eventually close the audit and assess your taxes based on assumptions the Revenue Agent made. IRS can also contact third parties (i.e. your neighbors, business partners, vendors) who have information useful in your audit.
  • Call an Experienced IRS Lawyer
    Having an expert by your side to prepare your legal defense, review your documents for potential issues, and handle all discussions with IRS will take a burden off your shoulders and can improve your chances of a successful audit resolution. Remember, anything you say or communicate to IRS can and will be used against you.

If you face an IRS tax audit alone, you are placing your business and assets at risk. Contact an IRS Tax Attorney today.

The Budget Reconciliation Act will re-fund the IRS with audits making up the lion’s share of the way the IRS intends to make back that investment in the Government Department. With the right financial and legal experts at your side, however, you can successfully navigate this complex process. Once you have received notice of an audit, contact our San Diego IRS attorneys! We can investigate your audit and determine your legal and business options.