Indiana Tax Audit Attorney

Does the IRS have you in their sights to audit your books? With the proper backing, it’s something you can smoothly resolve.

You should not handle tax audits by yourself because, in addition to the rate at which tax codes change, it is a battle that requires skill and expertise. Working with a tax attorney allows you to focus on the core of growing your business and serving customers, leaving the complex and ever-changing tax challenges to someone who specializes in them. Suppose the State of Indiana or the IRS shows up at your door: having an Indiana tax audit lawyer in your corner is your best assurance.

Indiana tax audit attorney Jerry E. Smith will effectively represent you when facing a tax audit. Whether for an individual or business, you can trust our services to make that IRS tax audit seem like a walk in the park. With us handling your case, we will protect your rights and deal with your issue with exceptional attention to ensure that you come out unscathed.

Do not hesitate to contact us at (317) 917-8680 today to schedule a free consultation with an Indiana tax lawyer.


What Is a Tax Audit?

Tax audits do not have to be scary, as long as you understand them. A tax audit involves the IRS or state taxing agencies’ probing information on your tax returns to ensure your reported tax data is correct. Hiring a tax audit attorney in Indianapolis will provide you with the best methods to avert a tax audit and the steps to take if you receive a tax notice from the IRS or the State of Indiana.

Although the examination of your business’s tax return can be concerning, with the aid of a tax audit attorney, there are strategies you can incorporate to reduce the likelihood of being under the scrutiny of the IRS.

The Types of Tax Audits You May Encounter

There are various IRS tax audit types, depending on the particulars of your situation. In the state of Indiana, you can receive an IN tax audit notice from the state taxing agency. An IRS tax audit attorney is equipped with the necessary skills to prepare you for tax audits from either the federal or the state taxing authorities.

Correspondence Audit

This is the most common of the IRS tax audit types. Typically, it involves the IRS sending you a 566 letter requesting required documentation or files to examine a particular aspect of a tax return. Correspondence audits are straightforward and only need you to prove that your tax returns match your account’s records with the IRS.

If there is a mismatch between your tax returns and the IRS records on your account, you may receive a CP2000 notice notifying you of the proposal of the IRS to balance your tax payments. You have the option to agree or disagree with the proposal. If you agree, you are required to make the necessary costs immediately to settle your records, or you can request a payment plan from the IRS that you can cover over a certain period.

On the other hand, if you disagree with the proposal, you need to prepare and send the necessary documentation that supports your records. The time allowed for submitting supporting documentation is 30 days, starting from the date you received the notice. Once the IRS examines your documentation and everything checks out with your tax returns, the matter is settled.

In the situation where supporting documentation is missing, an IRS tax audit attorney will be of great help to resolve your case. We recommend that you not ignore the IRS notice, as this will escalate the matter. Once you receive a letter notifying you of an audit by the IRS or the State of Indiana, do not hesitate to contact a tax audit attorney in Indianapolis.

Office Audit

The office audit occurs when your case is too complex to be settled by a simple correspondence audit. Like the correspondence audit, you will receive a notice; however, it will advise you to report to an IRS office to answer questions in an interview with a tax auditor. Attending the interview with a tax audit lawyer will help you prevent your case from expanding out of control. Your case can expand if the tax auditor suspects any issues in your tax returns based on the answers that you provide.

In the interview, the questions that you will answer include general questions inquiring about topics like your lifestyle and your business operations. These questions are meant to probe you to give answers that may reveal any oversight, including unreported income that is not present in the accounts. Tax auditors are professionally trained in seeking answers from taxpayers who may unknowingly and unintentionally reveal information that the auditors can exploit.

Consulting with a tax audit attorney before an office audit will help you keep a cool head and provide answers without implicating yourself or your business. You can conclude an office audit in one day, and you will be given ample time to give any further information if necessary.

Field Audit

This is the most complex and detailed of the four types of tax audits, involving intensive examinations and several interviews. In this case, the IRS will send representatives to your tax audit attorney’s office, your home or your business to examine your records in person. These representatives, known as IRS revenue agents, have higher expertise in performing audits than most other IRS representatives. The IRS revenue agents that will handle your case will typically specialize in your industry and possess some domain knowledge in addition to field experience.

A classic field audit is comprised of an examination of financial records onsite, interviews of business employees and an exploration of the business premises. The scrutiny related to a field audit is higher than the other tax audits, and IRS representatives are not restricted to inspecting a particular set of records. The audit agents will use the interviews with employees to gain a general understanding of the business workflow, structure of authority, internal proceedings, and accounting practices. A tax audit lawyer will ensure that you pass the interviews seamlessly and that your records are sorted out.

The field audit is the most extensive and complicated, lasting from a day to a week, depending on the size of the taxpayer’s business. Among the services of a tax audit lawyer is to ensure that the scope of your case is adequately presented, removing the possibilities of any gaps that the IRS agent can explore that may lead to further problems. If you have been notified of a field audit or want to get information to prepare for one, hiring a lawyer for a tax audit will benefit you.

Taxpayer Compliance Measurement Program Audit

The scope of this audit includes every and any document that the IRS believes has an impact or is related to your taxable income. These documents are not limited to your receipts, invoices and payment vouchers and can include personal documents such as your birth certificate. The principal purpose of the Taxpayer Compliance Measurement Program Audit is to update the IRS Discriminant Function System score, which rates the potential for change based on previous records with similar tax returns. This type of audit is immensely time-consuming as the taxpayer has to provide the required document for every tax return line.

You can also be randomly selected for an audit. Do not get caught off-guard by any type of tax audit. Schedule a free consultation with an IRS tax audit attorney at (317) 917-8680.

How the Tax Audit Process Works

According to the IRS fact sheet, the purpose of a tax audit is to verify the validity of the reported tax records. Getting an audit notice from the IRS does not imply that the taxpayer is dishonest about their tax returns or that they have made an error. On the contrary, there are cases where the taxpayer receives a refund or the case is settled without any change.

As a taxpayer, you have rights while interacting with IRS agents during an examination. As much as IRS representatives are mandated to respect these rights, they also have the right to enforce actions if the taxpayer fails to comply voluntarily. Throughout the audit process, the rights of the taxpayer include:

  • A right to professional and courteous treatment by IRS employees
  • A right to privacy and confidentiality about tax matters
  • A right to know why the IRS is asking for information, how the IRS will use it and what will happen if the requested information is not provided
  • A right to representation, by oneself or an authorized representative
  • A right to appeal disagreements, both within the IRS and before the courts.

While protecting your rights, a tax audit attorney will efficiently represent and settle your case.

How the IRS Selects Returns for Audit

There are various methods that the IRS uses to select returns for examination. These methods include:

  • Possible participation in inappropriate tax avoidance activities: Based on the IRS’s information from undisclosable parties, some returns are selected. Through efforts to identify individuals who promote and participate, the IRS gains knowledge that leads to an examination.
  • Computer scoring: The IRS determines some returns for audit based on their computer scores. These scores are based on computer programs that assign numeric values to each return. The scores include the Discriminant Function System (DIF) and the Unreported Income DIF (UIDIF). The DIF score refers to the return’s potential for change, modeled on past IRS experience with similar returns, while the UIDIF values the return’s potential for unreported income. On this basis, IRS agents sort out the highest-scoring returns, selecting some for examination and inspecting the items on such returns that are most likely to require review.
  • Large corporations: Annually, the IRS audits the returns of large corporations.
  • Information matching: When the payment reports do not match the income reported on the tax return, it requires examination.
  • Related examinations: Returns may be selected for audit when associated with another taxpayer, such as an investor or business partner whose returns are undergoing review.
  • Other: There are cases where the IRS selects returns for examination based on the relation with local compliance projects.

Frequently Asked Questions About Tax Audits

We understand that you have several questions about tax audits, including how they work and what they involve. We are available to answer your questions, and we will also represent you and give you appropriate guidance for your audit defense.

A typical audit involves the formal examination of an individual or business’s tax returns to ensure that information regarding the records is correct and there is no error due to fraud or inaccurate reports. Tax audits come in different forms, including the federal audit conducted by the IRS and the state audit, which the state taxing agency administers. For example, if you or your business reside in the State of Indiana, you should be prepared for an Indiana state tax audit.

Depending on the type of tax audit you encounter, legal advice and support will save you a lot of stress. Hiring a lawyer for a tax audit will be in your best interests as you may incur more expense than necessary during the tax audit process. In comparison with a Certified Public Accountant (CPA), a tax audit attorney offers you attorney-client privileges, which enable you to keep certain information between you and your attorney, which your tax audit attorney cannot disclose to other parties. You can focus on attending to matters that are more important to you, including keeping your personal life private from the public eye while leaving the tax situation in the capable hands of a tax audit attorney.

The documents you have to submit to help with the examination vary based on the complexity of the audit. Papers may differ, ranging from payment receipts to certificates. Your tax audit lawyer will be in the best position to advise you on required documents and how to present them to resolve your case.

Client Testimonial

”Jerry knows his stuff! Very knowledgeable on bankruptcy. He can find ways to save you money during the process, and like I said – he knows what he is doing! Hire him.” – Carina Taylor (Google Review)

Attorney Jerry E. Smith

Attorney & CPA Jerry E. Smith practices bankruptcy law and tax resolution. Smith’s practice focuses on representing consumer debtors and assisting them in getting a fresh start by reorganizing or eliminating their debt and attempting to put them in the best financial position possible. Mr. Smith has been practicing law since March 1, 2009. Before that, he was and still is a real estate investor. He also previously worked as a Cost Accountant, Financial Analyst, and Internal Auditor for two large multi-billion-dollar international consumer product companies. [ Attorney Bio ]

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    Let Us Resolve Your Tax Audit Case for You

    Facing any tax audit by yourself can be overwhelming. Not only do you have to deal with complex documentation processes, but you would require representation to effectively resolve tax audit cases, especially in situations where you may face penalties.

    With experience as a CPA and tax audit lawyer, Jerry E. Smith can negotiate with tax authorities on your behalf to fight for your rights and reach a favorable solution. Schedule a free consultation with us and be prepared for any tax audit by contacting us at (317) 917-8680.