Austin Tax Defense Law Blog

Texas residents may be concerned about getting selected for an audit by the Internal Revenue Service. However, having knowledge about what the process can entail and what a person's rights are in the process can go a long way toward addressing many concerns. First of all, its important to know that an audit does not always mean that there is a problem. It is possible someone is selected for an audit based on a statistical formula. Tax returns are compared against similar tax returns with the help of a computer program. Tax returns can also be selected for an audit if they involve issues with other taxpayers whose audits were selected for audit.

The IRS will provide the selected individuals with a written request for the specific documents that will be needed as proof to support the income, credits or deductions being claimed. All of these documents would have already been used to create the tax returns; they are not new ones. The request will also state how the documents should be presented, and when doing so it is important to ensure they are organized according to year, in order to prevent errors or misunderstandings.

As a taxpayer, you have several rights when dealing with the Internal Revenue Service (IRS). It is good to know these rights all the time, but this knowledge is especially important if you have been selected for an IRS audit because your rights as a taxpayer do not go away when there is a tax dispute.

Some of your rights as a taxpayer include the right to:

• Be informed. Under this right you are entitled to receive clear explanations on IRS forms and in correspondences with the IRS. It also means you have the right to be informed about any decisions the IRS makes about your account.
• Challenge the IRS’s position. You can raise objections and provide additional documentation in a timely manner and expect your objection to be fairly considered by the IRS.
• Appeal an IRS Decision. You can seek an impartial administrative appeal for many IRS decisions, including penalties.
• Finality. You are entitled to know the amount of time the IRS has to audit a specific tax year or that you have to challenge the IRS’s position. You also are entitled to receive notification when the IRS has finished an audit.

April 15. "Tax day". A day that is synonymous with the idea of filing your income taxes with the IRS.

Cultural institutions such as The Simpsons have based episode plots around a character working frantically to get their tax return in order and in the mail by the time the post office closes on April 15. 

It would be an understatement to say that it's stressful to receive notice from the IRS that you are being audited. The best way to combat your nerves is to be prepared -- and to have an experienced tax law attorney on your side every step of the way.

Here are some preliminary steps you can take to be ready before, during and after an audit from the IRS.