When you owe back taxes to the IRS, the last thing you need is another bill. So, it’s natural to wonder if you can solve your tax debt on your own without having to hire an attorney and spending thousands of dollars you probably don’t have.

The truth is that most tax problems can be resolved without having to hire an attorney, assuming you’re willing and motivated to learn how to do it yourself. This article will give you some more detailed guidelines for deciding when you should hire a tax attorney.

Do you need to hire a tax attorney?

You might not need to hire a tax attorney if all the following are true:

• You owe less than $50,000 to the IRS
• You are not self-employed or do not own a small business
• You do not have unreported income or other indicators of tax fraud
• You have not been contacted by an IRS Revenue Officer
• You’re not intimidated by the idea of talking to the IRS
• You’re willing to spend time figuring out the correct forms to use and how to fill them out

The above criteria mean that your case is fairly simple and straight forward. It’s likely that you can handle resolving such a case on your own without spending money on expensive help. However, it’s going to take some work. Just like any DIY project, you’re going to save money with sweat equity.

We offer an online course that will teach you how to solve your tax debt problems by yourself.

You probably need to hire a tax attorney if any of the following are true:

• You owe more than $100,000 to the IRS
• An IRS Revenue Officer is assigned to your case,
• You are self-employed or own a small business
• You have a complicated or unusual financial situation
• You’re intimidated by the IRS and don’t feel comfortable talking to them on your own
• You’re willing to hire someone to save yourself the time and stress of trying to figure it out yourself

If any of the above characteristics describe your situation, you stand a good chance of getting a better outcome by hiring a tax attorney than you would on your own. This is because your case is more complicated and is going to get more scrutiny from the IRS. It would be smart to have a tax attorney to prepare your financial documents and handle the negotiations. This could mean the difference between acceptance and rejection of your offer in compromise, or paying more for your offer than would otherwise have been required.

You must hire a tax attorney if any of the following are true:

• You have unreported income or other indications of tax fraud
• You have undisclosed foreign bank accounts
• You owe more than $1,000,000 to the IRS
• You have valuable assets that you want to protect and keep away from the IRS

If any of the above apply to your situation, then it would be very wise to at least consult with a tax attorney to evaluate your case and then hire one if appropriate. You are in the “danger zone” of IRS tax collections and could be looking at forced asset sales, business closures, criminal tax prosecution, and other negative consequences that can last for years to come. At the very least, you should find and consult with a qualified tax professional for a review your case.

Beware Tax Debt Relief Companies

Chances are you’ve already received a bunch of direct mail advertisements from various companies, law firms, and CPAs offering to help solve your tax debt. Beware the promises these companies are making. There are a lot of dishonest tax resolution providers who will prey on your desperation and take advantage of you while you’re at your lowest point. They are notorious for charging outrageous fees and doing nothing to actually resolve your tax debt.

To avoid getting ripped off by one of these companies, you should do as much research as possible. Learn about the options for resolving your tax debt, and try to get a grasp on what is realistic in your case and what isn’t. Also, find out as much as you can from independent sources about anyone you are considering hiring — and be especially wary of anyone from out of state. Here’s more information about how to avoid tax resolution scams.

The Bottom Line

The bottom line is this: 90% of tax problems can be resolved without hiring a tax attorney. But, if you’re unsure, then you need schedule a consultation with an experienced tax attorney to make sure that it’s safe to handle your tax debt on your own.

If you’d like to learn more about our online course that will teach you how to solve your tax problem by yourself.

**This page is for informational purposes only and does not constitute legal advice. If you have a tax problem, we strongly urge you to consult with a tax attorney. Self-help should only be considered after meeting with a tax attorney to evaluate your case.**

The post When Should I Hire A Tax Attorney? appeared first on Cross Law Group.

So you’ve finally found a tax attorney you’re considering hiring, and you’ve scheduled an initial consultation. In all likelihood, you have never met with a tax attorney in this setting and have no idea what to expect. That’s perfectly okay.

Start by observing the office. Is it clean and tidy? Well-decorated? Are you greeted upon walking in? All of these things might seem minor, but attention to detail is important in tax matters and these might be an indication that such attention is lacking.

When you actually sit down to meet with the tax attorney, consider asking these seven questions before you decide to hire them:

#1: How much of your practice is devoted to solving tax problems?

This one is a sure way to separate the dedicated tax controversy practices from the general ones. The dedicated tax controversy practice will devote a substantial part, if not all, of their practice to handling tax controversy and tax debt relief cases. This is who you want handling your case.

#2: Who will do the work on my case? A licensed attorney, CPA, or an EA?

This is an important question to ask, especially if you are dealing with larger firms or tax debt relief companies. In most of these, the person you meet with for the initial consultation will not be the person who ultimately handles your case on a day to day basis. That task will be delegated to someone else in the firm, usually of lower credential and experience than the person you’re meeting with today. This gets back to the bait and switch tactics discussed in Beware of Tax Debt Relief Scams. So, make sure if your case is delegated to someone else in the firm, that he or she is well credentialed and experienced. You don’t want to pay for a tax attorney but have an enrolled agent work on your case.

On the other hand, this is less likely to happen at smaller firms or with solo tax attorneys. With these, the person you meet with is very likely to be the person who is going to handle your case from here on out. But be wary — even solo practitioners might have paralegals handling some of their caseload, so you want to ask regardless.

#3 Do you offer a 100% satisfaction guarantee?

First, notice that you are asking for a satisfaction guarantee, not a guarantee of the outcome. A true tax attorney will never guarantee a certain result from your case. However, they may offer a 100% satisfaction guarantee of their services. This would allow you to get a refund of your fees if they become inattentive to your case, fail to communicate with you on a regular basis, or otherwise do not live up to your expectations. We’ll warn you now: not many tax professionals offer such a guarantee, but it’s worth finding one that does.

#4 How do you bill for your services?

This is an awkward subject for most people. However, you are potentially looking at several thousand dollars worth of fees, so it’s prudent to make sure you understand how those fees will be incurred. Here are some more direct questions to ask:

• Do you bill on a flat fee basis? If so, what is included in the flat fee and what is not?
• Do you bill on an hourly basis? If so, what is your hourly rate?
• Do you require an initial retainer up front? If so, is any part of it considered non-refundable? (this is a big one, head for the door immediately if the retainer is nonrefundable)
• Do you charge for incidental costs like copying and postage?
• Do you charge for administrative support costs? If so, how are those costs calculated?

#5 How will you keep me informed about my case?

This is an extremely important question. The bad tax attorneys are notorious for poor communication with clients, so you want to make the professional you’re meeting with has a clear policy for communicating with clients. He or she should say that they will give you monthly updates and always return client phone calls or emails within 24 hours.

#6 Why do you work in this area?

Technically speaking, there is no right answer to this question, but it will give you a great deal of insight into the type tax attorney you are hiring and their philosophies about tax controversy work. Most will be caught off guard by this question and will hem and haw for an answer. The good ones will be eager to tell you that they tax controversy gives them an opportunity to help someone who is going through one of the most difficult times of their life. Unlike tax preparation or tax planning, tax controversy (especially tax debt relief) involves solving the gut wrenching pain of real people. We’ve had grown men sob like babies in our office due to the stress tax debt was causing on their marriage and home life. Helping these people get rid of their tax debt is a noble pursuit, and anyone who overlooks that connection and does it for the money will not care enough about your case.

Bottom Line

Avoiding the bad tax debt relief services is difficult, but asking the above questions can help give you an idea if the person you’re talking to runs an honest business.

The post Six Questions to Ask Before Hiring A Tax Attorney appeared first on Cross Law Group.

Previously we discussed the IRS Collections Process and learned that the IRS assigns small and/or simple tax debts toIRS Automated Collections System (“ACS”) for collection.  This article discusses how the IRS ACS goes about collecting back taxes, as well as provide some tips on how to deal with them in resolving your tax debt.  If you have additional questions or would like to find out how we can help protect your rights when it comes to dealing with ACS, contact us to talk to an IRS Collections Attorney in Reno, NV.

What is ACS?

The Automated Collection System (“ACS”) is essentially a large call center (located in multiple cities) where ACS agents can contact taxpayers, review cases, and issue notices and collections actions on behalf of the IRS.  As a general rule of thumb, most tax debts of less than $100,000 get assigned to ACS.  Larger tax debts can be assigned to ACS if the case is relatively simple, but generally cases with tax debts of more than $100,000 are assigned to Revenue Officers working in the taxpayer’s local IRS office.

Cases in ACS are not assigned to specific agents. Instead, the cases exist in a pool where they are fielded by agents at random when the need arises.  This means that the collections process for cases in ACS can become very sporadic.  Cases are known to be in the ACS system for many months or even years without any collections activity occurring.  Others start up almost immediately after assignment.

The difference is due in large part to the use of a computer system that ranks and selects tax debts based on the amount owed and the age of the debt.  This tends to result in tax debts that are larger and/or older getting the most attention from ACS, while smaller and newer tax debts can fly longer under the radar.  However, this is not a reason to avoid resolving tax debt.  ACS can issue wage garnishments and bank account levies without warning, and the effects can be devastating.  It’s far better to work actively with the IRS in resolving tax debt than to take a “wait and see approach.”

Working with the IRS ACS to Resolve Tax Debts

Taxpayers are encouraged to contact the IRS and work with ACS to resolve their tax debt.  ACS agents can set up tax payment plans (or “installment agreements”) and put taxpayers into “non-collectible status.”  ACS agents cannot accept or negotiate tax debt settlements (or “offers in compromise”).

When trying to resolve tax debts with ACS, taxpayers should keep in mind that ACS agents are not as well trained in the tax law as other types of IRS personnel.  It is not uncommon for ACS agents to assert their authority improperly when trying to collect a tax debt.  Taxpayers should be well informed of their rights and prepared to stand up to ACS agents when appropriate.  Another strategy is to simply hang up when dealing with an aggressive agent and call back later, which will give the taxpayer a chance to talk with a new agent drawn from the call center’s pool.

When calling into ACS, taxpayers will be asked to provide a wealth of personal and financial information in order to assist the IRS in collecting back taxes.  ACS agents will usually ask for the name of the taxpayer’s employer, as well as the place where he or she banks.  Providing false information to ACS personnel is a felony, so taxpayers will have to either provide this information or hire a representative who does not have it.

The post IRS Automated Collections System appeared first on Cross Law Group.

In this article, we’re going to give you an idea of how much it normally costs to hire a tax attorney, starting with the types of fee structures that most attorneys use. Hopefully, you’ll be able to use this information to get a rough idea of what your legal fees might be, and can compare them to other options you have available.

Types of Tax Attorney Fees:

Tax attorneys generally charge either an hourly rate or a flat fee for their services.

• Hourly Rate: The majority of tax attorneys charge by the hour. Every attorney will charge a different hourly rate, but most rates are between $200 to $400 per hour. Highly experienced attorneys or attorneys working in big firms in large cities can charge more than $1,000 per hour.

• Flat Fees: The other options is a“flat fee,” which is a one-time charge regardless of how many hours the attorney spends on your case.  Flat fees are generally only used on simple or routine matters.

Which one is better? There are benefits and drawbacks to both of these fee types. An hourly rate is attractive because you don’t run the risk of overpaying if the attorney is able to resolve your case quickly or with very little work. On the other hand, you bear the risk of higher legal fees if the opposite occurs and your case takes more time to resolve than originally expected. This is one reason why most consumers prefer a flat fee arrangement, which allows them to lock in the cost of hiring an attorney.

At the end of the day, you might not have much choice. Generally, tax attorneys charge by the hour unless the case is very routine or simple. Feel free to request a flat fee, but the attorney might not be willing to take the risk of having to perform extra work if something unexpected happens in your case.

Typical Cost of Hiring a Tax Attorney

Here’s a very simple breakdown of the average prices that tax attorneys charge for common tax services (whether hourly or as a flat fee):

• Installment Agreement: $750 – $1,500
• Offer in Compromise: $3,500 – $6,500
• Penalty Abatement: $1,000 – $2,500
• IRS Audit (simple): $2,000 – $3,500
• IRS Audit (complex): $5,000 +
• IRS Appeals: $5,000 – $7,500
• US Tax Court Litigation: $10,000 +

Keep in mind that the prices quoted above are only averages. The actual fees you might have to pay will depend on where you live, how experienced of an attorney you hire, and the complexity of your case.

How Much Do We Charge?

To give you a better idea of how much it will cost to hire a tax attorney, we’ve provide a summary of the fees that our office charges for various tax resolution cases. Keep in mind that we help clients all over the country, even though we are located in Reno, NV. Our fees tend to be significantly lower than attorneys located in regions with higher cost of living (like southern California).  Your case might be less or more depending on the unique characteristics of your case (click here to request a price quote):

• Fees for Tax Debt Relief
• Fees for Tax Audit Defense

Save Money by Doing It Yourself

If you can’t afford a tax attorney, you have the option of handling your tax matter by yourself. Although that might sound intimidating, there are plenty of resources available that will help you learn how to solve your tax problem yourself.

If you are thinking about doing it yourself, check out our Self Help Courses. These are online web courses prepared by our tax attorney that cover everything from installment agreements to US Tax Court litigation. Each course gives you a step-by-step guide on how to resolve your specific tax problem. If you’re interested in our self-help course on how to get rid of your tax debt.

Check out these articles for more helpful information:

• The truth about tax debt relief companies
• How to find a reputable tax attorney
• Enrolled Agent vs. CPA vs. Tax Attorney

The post How Much Does a Tax Attorney Cost? appeared first on Cross Law Group.

Selecting the right tax professional to help with your tax problems is no different than picking a dentist, plumber, or mechanic. You want to make sure they are competent, trustworthy, and charge a reasonable rate.

As you probably already know, there are many different kinds of tax professionals out there who will gladly offer to help you settle your tax problems. These include enrolled agents, CPAs, or tax attorneys. However, do you know the difference between these tax professionals and which one is best for your particular case? If not, you aren’t alone. There is a lot of confusion in the general public about tax professionals and why someone would chose one over the other when they have a tax problem.

In this article, we’ll give you some insight into the differences between Enrolled Agents, CPAs, and Tax Attorneys so that you can make an informed decision on what kind of tax professional you want to handle your case.

Enrolled Agents

An enrolled agent is a person who is licensed to represent taxpayers before the IRS after passing a proficiency exam or working as a former IRS employee. Compared to CPAs and Tax Attorneys, enrolled agents will generally charge less for their services. To the unsuspecting client with limited funds available, this might seem like an attractive option. However, there is a reason they charge less. Enrolled Agents are the least educated of the tax professionals and have the lowest requirements for certification. They are not required to have e a college degree or any other specific tax related education.

Here’s an illustration that might be applicable: One day, a man walked down the street looking for a barber. On the corner he found a barber shop that advertised $5 haircuts. There was a line out the door and a dozen or so barbers inside, all busily cutting hair. Next door, there was another barber shop that was equally as busy. This barbershop had a sign outside that read “We fix $5 haircuts for $15.”

Now, we don’t want to completely pick on enrolled agents. After all, there were more than a few satisfied customers at the $5 barbershop and not all of the barbers there were bad (we assume). The point is that Enrolled Agents are an excellent choice and can save you from paying the extra cost an attorney or CPA, but only under the right circumstances. That is, if your haircut is simple, then all you need is $5 haircut. There’s no point in overspending. But if your haircut needs a more skilled and experienced barber, you should be willing to pay more. The same thing goes for settling your tax debt. We’ve done more than our share of clean up jobs where the client started with an enrolled agent and only later realized that the agent was not equipped to handle the complexity of their case. If you are confronted with the choice of hiring an Enrolled Agent to save money or an Attorney/CPA that will cost more, we recommend the latter in most cases.

Best for: Tax preparation, miscellaneous tax filings, and other routine matters

CPAs

“Certified Public Accountants” are accountants who have a degree in accounting, at least two years of work experience, and have passed the CPA exam. This is not an easy thing to do, so most CPAs are smart and capable professionals.

However, it might surprise you to learn that most CPAs do not actually specialize in taxation. The vast majority of CPAs only work on tax matters for three or four months out of the year, spending the rest of the time on other accounting services. And even then, their time is spent on tax preparation, with tax resolution making up only a fraction of their focus and experience. Also, CPAs are not trained to be represent someone in an adversarial proceeding, such as negotiating a tax settlement with the IRS. This means that you should exercise care when considering a CPA for your tax debt relief needs. The Offer in Compromise process, for example, is complex and often contentious, so we do not recommend leaving it to someone who handles tax disputes on an irregular basis and is not trained on how to argue on someone else’s behalf.

Best for: Complex tax return preparation

Tax Attorneys

Tax attorneys are lawyers who specialize in tax law. As attorneys, they are uniquely qualified with knowledge of the tax law, as well as the training that lawyers receive on representing clients in adversarial proceedings – which includes negotiations with the IRS. The best tax attorneys have a Masters of Law in Taxation, which is the highest educational degree available for tax law, but not all have one of these advanced degrees.

As you can probably imagine, there are many different types of tax attorneys. Some specialize in corporate tax, other’s focus exclusively on partnership taxation, while still other’s work only with trusts and estates. So, it’s important to make sure you hire a tax attorney with a practice specializing in tax controversy. Ideally, this attorney will have a practice dedicated exclusively to tax controversy, but this is not a strict requirement. As long as a significant portion of the practice involves tax controversy, the attorney is probably a good choice for resolving your tax debt or other tax problem.

Best for: Tax controversy matters and representing clients in IRS proceedings.

The Bottom Line

Hire the right tax professional for your needs. If you need a tax attorney, don’t skimp and hire an enrolled agent. And visa-versa.

The post Enrolled Agent vs. CPA vs. Tax Attorney appeared first on Cross Law Group.

What is a CDP Hearing?

Simply put, a Collection Due Process Hearing (“CDP Hearing”) is a hearing to determine whether an IRS Collections action is proper under the Internal Revenue Code. The hearing is conducted by the IRS Office of Appeals, which is an independent agency within the IRS that exists to resolve disputes between taxpayers and the government. The hearing is held before an IRS Appeals Officer, who is typically a former IRS Revenue Agent with a great deal of knowledge and experience.

Why should I request a Collections Due Process Hearing?

The IRS has very broad collection powers and can easily levy bank accounts and garnish wages. However, taxpayers have certain guaranteed rights under the law that even the IRS must respect. A CDP hearing is one way for taxpayers to enforce these rights against the IRS. In a CDP hearing, the taxpayer can:

• Request an alternative collection method, such as a tax payment plan
• Raise an Innocent Spouse Defense
• Argue for abatement of interest and penalties
• Challenge the underlying tax debt (in some circumstances)
• Argue against the filing of tax lien,
• Challenge the decision by a Revenue Officer to reject your proposed payment plan.

If the taxpayer loses in the CDP hearing, he or she may appeal the outcome to United States Tax Court where the matter will be reviewed and decided by a US Tax Court Judge.

When can I request a Collections Due Process Hearing?

The right to request a collections due process hearing does not last forever. The taxpayer can only file the request with Form 1253 within 30 days after receiving any of the following notices:

• Notice of Federal Tax Lien Filing and Your Right to a Hearing under IRC 6320
• Final Notice — Notice of Intent to Levy and Notice of Your Right to a Hearing
• Notice of Jeopardy Levy and Right of Appeal
• Notice of Levy on Your State Tax Refund – Notice of Your Right to a Hearing
• Post Levy Collection Due Process (CDP) Notice

After filing the request, all collections activity on your tax debt is put on hold until your hearing is resolved.

What if I don’t file the CDP request in time?

The Collections Due Process hearing is only available for 30 days after notice from the IRS of collections activity (see above). A taxpayer who fails to file a CDP request within this time period must instead request a “Equivalent Hearing” through the IRS Collections Appeals Program (CAP) within one year from the notice.

An equivalency hearing requested through CAP gives the taxpayer an equivalent opportunity to contest the IRS’s proposed collection action. However, there are certain things the taxpayer cannot do in an equivalency hearing, including challenge the underlying tax debt and cannot appeal the hearing’s outcome to US Tax Court. Also, the taxpayer does not receive a hold on collections while the hearing is pending. So, even though the taxpayer can challenge wage garnishments and bank account levies in an equivalent hearing, a CDP hearing is still preferable.

For more information about IRS Garnishments & Levies, please see:

• IRS Collections Process
• IRS Automated Collections (ACS)
• IRS Revenue Officers
• Our Approach to Collections

The post What is a Collection Due Process Hearing? appeared first on Cross Law Group.

Audit Type: Field Audit

IRS Field Audits are the most in-depth and detailed level of IRS audit examinations. Unlike other audit types, field audits are conducted only by IRS Revenue Agents — the most highly trained type of auditor used by the IRS. Revenue Agents typically have an accounting degree and have completed substantial tax related course work. Many are even licensed CPAs. In addition, many Revenue Agents “specialized” on a particular industry and therefore have a great deal of familiarity with the normal ranges for income and expenses for your specific type of business.

It’s not unusual for the field auditor to immediately request your bank statements and accounting records. If you do not provide them, the auditor will summon them from your bank or accountant. The auditor will then use these statements to reconcile your tax return, looking for errors and discrepancies that may lead to an expanded audit. In the case of closely held corporations, this may even lead to an audit of all the individual owners of the corporation.

Another common method for the auditor to use in a field audit is to compare your lifestyle with your reported income. If the auditor believes that you are living a lifestyle that cannot be accounted for by your income or debt, he or she will assume that you have unreported income.

Due to the invasiveness of field audit, as well as the possibility for things to spiral quickly out of control, we strongly advise that you hire a tax attorney to represent you during this type of audit. IRS Revenue Agents can seem friendly, but their pleasant demeanor is often used to garner your cooperation in order to obtain information that can be used against you later. Even innocent sounding questions are often just part of an overall attempt to get you talking and possibly paint yourself into a corner.

Contrary to popular belief, hiring a tax attorney is not a sign of guilt. Instead, it shows the agent that you take this matter seriously and are not one to be pushed around. Revenue Agents are less likely to take aggressive or unreasonable positions as a result. Furthermore, many Revenue Agents actually prefer to work with a tax professional instead of the taxpayer due to the ease of communication.

The post What is an IRS Field Audit? appeared first on Cross Law Group.

In previous articles, we discussed the Top 10 IRS Audit Triggers and also learned the answer to the question Why was I Audited? This article will cover the actual audit appointment, as well as provide some tips on how to win your IRS audit. If you have additional questions or would like to find out how we can help protect your rights when it comes to an IRS audit, contact us to talk to an IRS Audit Attorney in Reno, NV.

The Audit Appointment

Most IRS audits take place at the local IRS office. IRS Offices are usually very large and house a variety of different departments, with “audit examination” being only one of them. So, make sure you pay attention to the correct floor and room information on your audit notice beforehand.

Once at the correct room, you’ll wait in the reception area until auditor comes out and calls you by name. He or she will escort you back to either a small conference room or their own cubicle. Most auditors will start off with a little small talk, so this is a good chance to remind you that IRS auditors are human beings just doing their job like the rest of us. So be reasonably polite and courteous. It doesn’t pay to be rude or snarky. The key is to be cooperative, but not overly helpful. The auditor is, after all, trying to get you to reveal mistakes on your tax return.w

What to Expect During Your IRS Audit

The audit appointment will last anywhere between 1-4 hours, depending on how thorough of an auditor you have, and how many issues need to be addressed on your tax return. The audit will officially start with a quick review of the audit process and your appeal rights, and then move on to a standard questionnaire of about 20 questions.

You’ll be asked things like “What’s your occupation?”, “Do you have any children?”, “Do you have any investments or retirement accounts,” “Do you have a safety deposit box,” and even “Do you have any foreign bank accounts.”

Be careful here. The auditor actually knows the answers to many of these questions. He or she is both testing your credibility and also hoping at the same time that you’ll reveal a problem with your tax return that they didn’t know about already. So, answer these questions carefully.

After the questionnaire, the auditor will start to ask you about specific problem areas on your tax return. Most often these are unusually large deductions, like charitable contributions, unreimbursed employee expenses, or if you have a schedule C business, any suspicious looking expenses. As a side note, your original audit notice should’ve already identified these problems, so you should have an idea already of what they’re going to be and have come prepared to explain these issues and provide supporting documents for them — like receipts and cancelled checks.

Usually the auditor will review the documents right then and there, adding them up, checking to see where they’re from and what they’re for, and usually asking several questions along the way. But, some will just take them from you for review at a later time, o it’s smart to bring copies instead of originals.

After your auditor has gone over everything he or she wanted to discuss, your audit interview will come to an end. Unless you really knocked it out of the park, don’t expect any kind of decision out the auditor at this point. They’re just going to thank you for coming in and tell you that they’ll issue a report of their findings shortly, which you’ll typically receive in a couple of weeks.

So, that’s a basic run down of what happens in an IRS audit. Keep in mind that if you hire an attorney to represent you in your audit, you don’t have to go meet with the auditor or even talk to them on the phone. Your attorney will go in your place.

More Information

You might find the following articles helpful

• Types of IRS Audits
• What To Expect in an IRS Audit
• Top 10 IRS Audit Triggers
• Winning IRS Audit Strategies

The post What to Expect During An IRS Audit appeared first on Cross Law Group.

We typically charge on an hourly basis for IRS audit representation and related cases. This is because it’s very difficult to predict how much time will be required for any given audit. There are a number of factors that impact how long an audit will take to resolve, including the quality of your supporting documentation and the level of scrutiny given to your return by the auditor.

Here are some guidelines for how much IRS audit defense usually costs:

• Simple Audits: For a simple audit, the cost is typically $2,000 to $3,000. A simple audit is one that does not involve a Schedule C business or rental property. It usually focuses on Schedule A items, such as unreimbursed employee expenses or charitable contributions.
• Moderate Audits: For a moderately complex audit, the cost is typically $3,000 to $6,000. A moderately complex audit is one that focuses on a Schedule C business or rental property. It typically involves substantiation for business expenses and unreported income.
• Complex Audits: For a complex audit, the cost is typically $7,500+. This usually involves a small to medium size business and may have issues related to business expenses, unreported income, or payroll issues (such as workers misclassified as independent contractors).
• Appeals: Our fees for going through IRS appeals typically range from $5,000 to $10,000.
• US Tax Court: Our fees for taking a case to US Tax Court typically range from $7,500 to $15,000.

For IRS audits and related cases, we generally request an upfront retainer of $1,500 to begin working on a case. Additional retainer payments will be required as the case progresses and legal fees are billed.

Cheaper Options

If the costs outlined above are more than you are willing to pay, you might consider our self-help courses that will teach you how to do any of the above listed services by yourself.

The post Cost of IRS Audit Defense appeared first on Cross Law Group.

In previous articles, we discussed What to expect during an IRS Audit and also learned the answer to the question Why was I Audited? This article will cover the different types of audits and provide a few strategy tips for winning your audit. If you have additional questions or would like to find out how we can help protect your rights when it comes to an IRS audit, contact us to talk to an IRS Audit Attorney in Reno, NV.

IRS Audit Types

IRS Correspondence Audit

The first type of audit is the correspondence audit. This type of audit is conducted by mail, which means you never actually meet or even speak with an auditor. In a correspondence audit, the IRS sends you a letter requesting more information on a certain item on your tax return, and then you mail that information in. For this reason, correspondence audits tend to be pretty narrow in scope and limited to just one or two items the IRS thinks were just a mistake. They usually come up when your tax return is missing income from a 1099 or W-2 that the IRS has received in your name. Occasionally, the IRS will use a correspondence audit for small deduction items like a charitable contribution or unreimbursed employee expenses.

The key to prevailing in a correspondence audit is to provide documents in a very thorough and easy to understand manner, since you will not have the opportunity to explain them in person. Although still stressful, an IRS correspondence audit is the easiest audit type to have. Read more about IRS Correspondence audits.

Office Audit

The second type of IRS audit is the office audit. Unlike a correspondence audit where everything is done by mail, office audits are done face to face with an auditor at your local IRS office. The auditor will question you directly about your tax return and the supporting documents you’ve provided. This can be stressful , so be careful not to slip up and give up information that can hurt you down the line.
The key to winning an office audit is to be cooperative without being helpful. Provide exactly what the auditor asked of you, but nothing more. While correspondence audits are very limited in scope, office audits can always expand to additional items and even additional years. So, it’s important to keep the auditor focused on a narrow set of issues and not give them any reason to dig further into your tax return. Read more about IRS Office Audits.

Field Audit

The third type of IRS audit is the field audit. Fields audits are typically only used for corporations and other business entities. In a field audit, the auditor actually comes out to your place of business to meet with you and inspect your financial records. This can be very disruptive, which is why it might be smart to hire an attorney if you’re going through a field audit. This way, your attorney can host the auditor at his or her office, and make your records available there as well.Read more about IRS Field Audits.

More Information:

You might find the following articles helpful:

• What To Expect in an IRS Audit
• Top 10 IRS Audit Red Flags
• Winning IRS Audit Strategies

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