IRS Audits Explained: What Taxpayers Should Expect and Why Experience Matters.
Learn what to expect during an IRS audit, how to prepare, and how Liberty Financial Solutions draws on nearly 15 years of firsthand IRS experience to guide taxpayers.
IRS Audits Explained: What Taxpayers Should Expect and Why Experience Matters.
The words “IRS audit” can create immediate anxiety, but understanding the process can make the situation more manageable. An audit is an examination of information reported on a tax return. The IRS may ask for records, explanations, or additional documentation to determine whether items on the return were reported correctly.
For taxpayers and business owners searching for IRS audit representation in Arlington, Fort Worth, Mansfield, Dallas, Kennedale, Lewisville and the surrounding DFW area, having experienced guidance can be valuable.
At Liberty Financial Solutions, one of the firm’s key differentiators is Brad Horton’s nearly 15 years of experience working for the IRS. That firsthand perspective provides insight into how IRS examinations are approached, how documentation is evaluated, and how tax issues are communicated inside the agency.
How an IRS Audit Begins
An audit generally begins with written communication from the IRS. The notice should identify the tax year and the issue or issues being examined.
Some examinations may be handled largely through correspondence. Others can involve more direct interaction and broader review.
The specific facts matter. A business audit involving multiple revenue streams and deductions may require a different approach than an individual examination involving a single item.
What the IRS May Ask For
Depending on the examination, the IRS may request records supporting income, deductions, expenses, credits, business activity, investments, or other information reported on the return.
For business owners, this can include accounting records, bank statements, invoices, receipts, payroll information, contracts, asset records, and other financial documentation.
Organization is important. A well-structured response can help make the issues easier to understand and address.
Why IRS Experience Can Matter
Tax law is only part of an audit. Procedure matters too.
Brad Horton spent nearly 15 years with the IRS and served in roles that included revenue agent, management, and subject-matter expertise. He also contributed to portions of the Internal Revenue Manual, which provides operational guidance for IRS personnel.
That experience can provide valuable context when evaluating an audit. Understanding how the IRS develops issues, reviews records, communicates proposed changes, and moves matters through the examination process can help taxpayers prepare more effectively.
It is important to note that prior IRS experience does not guarantee any particular outcome. Every case depends on its own facts, documentation, applicable law, and procedural posture. The value lies in informed preparation and a clearer understanding of the process.
What Happens If the IRS Proposes a Change?
An audit may result in no change, an agreed adjustment, or a proposed adjustment that the taxpayer disputes.
If additional tax is proposed, taxpayers should understand the basis for the adjustment before simply accepting or rejecting it. The documentation, legal position, and procedural options should be reviewed carefully.
Depending on the circumstances, taxpayers may have opportunities to provide additional information, dispute findings, or pursue administrative appeal rights.
Avoid These Common Audit Mistakes:
- Ignoring the notice.
- Missing deadlines.
- Submitting disorganized or incomplete records.
- Providing information without understanding why it is being requested.
- Assuming the IRS is automatically correct.
- Assuming the IRS is automatically wrong.
- Making major tax decisions before understanding the full scope of the examination.
- Local IRS Audit Representation in DFW
Liberty Financial Solutions works with taxpayers facing audits, tax notices, amended returns, tax liabilities, and other IRS problems across Arlington, Mansfield, Fort Worth, Kennedale, Dallas, Lewisville, Grand Prairie, Irving, Bedford, Euless and surrounding communities.
If you are looking for IRS audit help near Arlington, tax audit assistance in Fort Worth, or experienced IRS tax support in the Dallas-Fort Worth area, our team can help you evaluate the situation and prepare for the next step.
Received an IRS Audit Notice?
Do not face an audit without understanding what the IRS is asking and what your options may be.
Put nearly 15 years of firsthand IRS experience to work for your situation. Schedule a consultation with Liberty Financial Solutions at www.lfsolutions.us