Ready For An IRS 'Examination'?

Ready for an IRS examination?The opening bell for the 2016 tax-filing season will be rung in less than a week, on Tuesday, January 19th. That's when people can begin filing their tax returns with the Internal Revenue Service, and it's also the unofficial beginning of IRS audit season.

A recent article in Accounting Today cautions accountants that people facing audits "need hand-holding and a calm, soft voice." Frightened clients can spook easily, according to the publication. It's wise for accountants to refrain from using the word "audit," as it can conjure up images of legal and financial nightmares. "‘Examination’ is much less frightening," an author of a book on small businesses and taxes says.

Cleveland business owners who have been through the process know that it can be grueling, as the federal agency probes into purchases, deductions, expenses, etc.

The good news, according to Accounting Today, is that IRS audits are shrinking in frequency. In fiscal 2014, the IRS audited 1.2 million taxpayers, the lowest total in a decade and more than 300,000 fewer than 2010s total. The long-term trend in audits is downward, but that's likely to be of little comfort to the person in the crosshairs in coming months.

In our next post, we will have more on audits and what accountants think and do when facing one.

For those who face an “IRS examination,” experienced legal representation can help get you through a difficult process. And if the audit results in a finding of a significant tax liability, a knowledgeable, skilled tax attorney can appeal the finding.

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