Robert J. Fedor, Esq., L.L.C.

IRS to impose deadlines on audits starting in 2014

For any individual taxpayer or business entity, a request from the Internal Revenue Service typically signals that something is amiss. In cases where an individual or business learns they are the subject of a formal IRS audit, it can take a considerable amount of time to delve into financial records to identify and retrieve requested documents and information.

Currently, there are no hard deadlines with regard to when the subject of an IRS audit must provide requested information. Come Jan. 1, however, the IRS warns that strict deadlines will go into effect and be readily enforced.

Most individual tax payers and small business owners will not be impacted by the changes as the new IRS audit deadlines only pertain to those individuals or business with assets in excess of $10 million dollars. From the initial date that information is requested, impacted individuals and business entities have 49 days with which to comply with the request and produce sufficient documentation.

If those targeted fail to meet the initial deadline, the IRS may take legal action. In cases where a business fails to comply with the audit deadlines, the IRS may seek a summons at which time news of the impending IRS audit can be made public. This could potentially adversely impact a company’s financial standings and overall reputation.

Individuals or businesses who have concerns about the changes being made to the IRS audit process or who find themselves the subject of an IRS audit, would be wise to seek the advice and assistance of a legal tax professional. An attorney who has experience handling criminal tax matters related to tax audits can help provide for the best possible legal outcome.

Source: Reuters, "Hand over tax audit information, clock is running: IRS," Patrick Temple-West, Nov. 22, 2013

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