Five Minute Read: Learn About Civil Tax Audits

IRS auditWhen the Internal Revenue Service (IRS) is interested in your business, the result could be a civil tax audit.


Even if you know you have nothing to worry about, you might be concerned about receiving a friendly letter from the IRS suggesting that you sit down for a talk while providing a few years of your tax documents for review. To be clear, COVID-19 has changed a lot of things. The likelihood of any in-person IRS tax audit, or any tax audit for that matter, is diminished. During the lull, it is a good idea to brush up on why the IRS might be curious about your financials—and what they might do about it.


As we have discussed before, there are a couple of ways you could land on an IRS audit list, including:

  • The IRS develops formulae against which taxpayer data is driven. Your return might fit a pattern, not fit a pattern, or simply be a “calculated” random choice.
  • Your current or past returns may not fit an expected pattern, leading to your return being set out for review. You may have experienced a significant rise or drop in income, or again, software may identify an irregularity in your current return.
  • If you are an investor or associated with a company or group of businesses that are under audit, your business and personal returns may be pulled in simply because you are associated with that cohort. Not exactly guilt by association, but not far from it.


If you are selected for an audit, the IRS will contact you via mail with directions about an audit. An audit can be performed by mail and that mode is likely to pick-up steam in the future. If you are contacted by telephone about an audit, do not reveal any information but politely ask for the name and telephone number of the caller. The IRS states they will not start a taxpayer audit by telephone.


The letter you receive should list out documents they would like to review, both hardcopy and electronic. Most of the time, audits are limited to the past three years of returns.


If you receive an audit letter from the IRS, read it carefully, and then contact an experienced tax attorney in your area. Legal counsel will help you respond on time with appropriate documents. Seasoned legal help can help keep the process smooth and uneventful, especially if you have a complex return or considerable wealth.


Bottom-line—a lawyer experienced with criminal tax investigations knows how to manage your experience with the IRS with an emphasis on keeping it civil.


Cleveland tax lawyers provide strong defense on civil and criminal tax matters

From offices in Chicago and Cleveland, Illinois, the legal team at Robert J. Fedor, Esq., LLC provide experienced legal service if you face an audit, criminal tax charge, or other allegation. Call us at 800-579-0997 or contact us today.


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