AUDIT & REPRESENTATION
The fee and agreement for tax preparation includes assistance and representation you may need for that tax year in connection with tax agency inquiries, examinations, and/or subsequent assessments, by the agencies with which they were originally filed. We believe you are best served by incorporating these services with your tax preparation fee. This includes up to 6 hours of our time on any single or combined effort for the tax year engaged, such as:
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Reviewing and explaining any letters you receive
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Preparing and filing a Power of Attorney for your signature to represent you, if necessary
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Answering letters or other correspondence from the agencies with which your covered income tax returns were originally filed.
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Organizing your records (recordkeeping) if your return is audited.
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Time spent with an auditor at either our offices or the local office of the taxing authority.
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In the rare event that your issue requires additional time, a new engagement and retainer will be required.
Understanding IRS Compliance Activity
The rapid advancement of technology over the past twenty years has created a double-edged sword for taxpayers.
Reporting and matching technology have been accelerated, while the administration of these programs has been stuck in an analog process that has been understaffed and underfunded. Erin Collins, the Taxpayer Advocate, has called paper “IRS’ kryptonite” - but many of the processes IRS uses are in fact done on paper.
Add to these difficulties a constantly changing tax code and political divides, and you have a recipe for mistaken assessments, frustration, and stalemates.
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In order to better understand tax agency correspondence and audits, we’ve created the following infographic. The vast majority of issues can be dealt with in under 6 hours.
The IRS, state, and local governments have multiple systems of data analysis to ensure accurate tax reporting and collection. In addition, information sharing agreements across agencies enhances tax compliance across all of them. IRS has two forms of taxpayer inquiry, and each of those can be broken down into sub-types:
Data Source: https://www.irs.gov/statistics/compliance-presence