An IRS audit does not automatically mean you’ve done anything wrong, but it does require a timely and informed response. An experienced IRS audit and appeals attorney can communicate with the IRS on your behalf, explain what information is required, and help protect your rights throughout the process.
Whether you’re an individual taxpayer, business owner, self-employed professional, or contractor in Rockville or elsewhere in Montgomery County, early legal guidance can often make the audit process more manageable and improve your options if you disagree with the IRS’s findings.
Need help with an IRS audit? Call Gabaie & Associates, LLC at (410) 358-1500 or visit our Contact Page to schedule a free consultation.
Why Does the IRS Select Tax Returns for Audit?
Most audits are not random.
The IRS uses several methods to identify returns that may require additional review, including computerized scoring systems, information matching, and referrals from related examinations.
Common audit triggers include:
- Significant changes in income from prior years
- Large business expense deductions
- High charitable contributions relative to income
- Rental property losses
- Cryptocurrency transactions
- Unreported income
- Self-employment income
- Cash-intensive businesses
- Mathematical inconsistencies
- Information that doesn’t match Forms W-2 or 1099
Being selected for an audit does not necessarily mean additional taxes are owed. Many audits simply involve verifying information reported on a return.
What Types of IRS Audits Are There?
The IRS conducts several different types of audits depending on the complexity of the issues involved.
Correspondence Audit
A correspondence audit is handled through the mail. The IRS requests documentation supporting specific items reported on your tax return, such as deductions, credits, or income.
These are generally the least complex audits but still require careful attention to deadlines and supporting documentation.
Office Audit
An office audit requires you to meet with an IRS examiner at a local IRS office.
The examiner may request financial records, receipts, business documentation, or other information supporting your return.
Preparing before the meeting can help avoid unnecessary complications.
Field Audit
A field audit is typically the most comprehensive type of examination.
An IRS revenue agent visits your home, business, or accountant’s office to review financial records and operations.
These audits often involve businesses, higher-income taxpayers, or more complex tax issues.
For many taxpayers, professional representation is especially valuable during field audits because communications with the IRS can become far more extensive than in other types of examinations.
What Happens During an IRS Audit?
Although every audit is different, most follow a similar process.
- The IRS sends an audit notice identifying the tax year under review.
- The notice explains which items require verification.
- You gather and submit supporting documentation.
- The IRS reviews the records and may request additional information.
- The examination concludes with proposed findings.
- You may agree with the findings or dispute them through the appeals process.
Responding promptly and providing organized documentation often helps keep the audit moving efficiently.
What Records Should You Keep During an Audit?
Good documentation is often the strongest defense during an IRS audit.
Depending on your situation, the IRS may request:
- Tax returns
- Bank statements
- Payroll records
- Business accounting records
- Receipts
- Mileage logs
- Invoices
- Property purchase records
- Investment documentation
- Forms W-2 and 1099
Missing documentation does not always end your case, but alternative records or explanations may be needed to support your position.
What If You Disagree With the IRS Audit Results?
Not every IRS audit ends with an agreement.
If the IRS proposes additional taxes, penalties, or interest that you believe are incorrect, you may have the right to challenge those findings through the IRS appeals process. In many cases, resolving a dispute through an appeal is faster and less expensive than going to court.
An experienced IRS audit and appeals attorney can evaluate the IRS’s conclusions, identify potential errors, and determine the most effective path forward.
What Is the IRS Independent Office of Appeals?
The IRS Independent Office of Appeals is a separate division within the IRS that reviews disputes between taxpayers and the agency.
Its purpose is to resolve tax controversies fairly and impartially without litigation whenever possible.
An appeal may allow you to:
- Challenge the IRS’s factual findings
- Present additional documentation
- Correct misunderstandings or calculation errors
- Negotiate a settlement based on the facts and applicable tax law
- Resolve the matter without filing a lawsuit
Many tax disputes are successfully resolved through the appeals process before they ever reach federal court.
How Do You Appeal an IRS Audit?
The appeals process depends on the type of examination and the amount of tax involved, but it generally follows these steps:
- Review the IRS examination report.
- Identify the findings you disagree with.
- Submit a written protest or appeal request, if required.
- Provide documentation supporting your position.
- Participate in discussions with an Appeals Officer.
- Reach a settlement or pursue additional legal remedies if necessary.
Appeal deadlines are strict. Missing a filing deadline can limit — or even eliminate — your ability to challenge the IRS’s determination.
Can You Be Represented During an IRS Audit?
Yes.
Many taxpayers choose to have an attorney represent them throughout an IRS audit. In many situations, your attorney can communicate directly with the IRS, prepare responses, organize documentation, and attend meetings on your behalf.
Professional representation may be especially valuable if:
- The audit involves a business.
- Multiple tax years are under review.
- The IRS is proposing substantial additional tax.
- Records are incomplete or unavailable.
- You disagree with the auditor’s conclusions.
- Fraud or potential criminal issues have been raised.
- The audit could expand into additional tax years.
Having experienced representation can also help ensure that communications remain focused on the issues being examined and that your rights are protected throughout the process.
How Can an IRS Audit Affect Rockville Businesses?
Rockville is home to a diverse business community, including medical practices, technology companies, government contractors, consultants, retailers, and other professional service firms.
Business audits often involve additional records and more complex issues than individual examinations.
The IRS may review:
- Business income
- Payroll records
- Contractor classifications
- Business expense deductions
- Vehicle expenses
- Equipment purchases
- Retirement plans
- Sales and accounting records
For business owners, preparing complete and organized documentation early can often help reduce delays and keep the audit focused on the issues identified by the IRS.
Why Work With Gabaie & Associates?
IRS audits can become stressful quickly, particularly when deadlines are approaching or significant tax adjustments are proposed. Having experienced legal representation can help you understand your options and respond strategically.
Gabaie & Associates represents individuals and businesses in Rockville facing:
- IRS correspondence audits
- Office audits
- Field audits
- IRS appeals
- Proposed tax assessments
- Penalty disputes
- Business tax examinations
- Individual income tax audits
Every case begins with a careful review of the facts, the IRS’s concerns, and the documentation available to support your position. From there, we work to identify the most effective resolution based on your circumstances.
Frequently Asked Questions
What should I do if I receive an IRS audit notice?
Read the notice carefully and note all deadlines. Do not ignore the letter, even if you believe the IRS made a mistake. Reviewing the notice with an experienced tax attorney early can help you determine the best response.
Does an IRS audit mean I did something wrong?
No. Many audits are selected through automated screening or information matching. An audit simply means the IRS wants to verify information reported on your return.
Can an attorney represent me during an IRS audit?
Yes. An attorney can communicate directly with the IRS, prepare documentation, respond to information requests, and represent you during meetings with IRS personnel.
How long does an IRS audit take?
The timeline varies depending on the complexity of the issues involved. Some correspondence audits are resolved within a few months, while larger business or field audits may take considerably longer.
Can I appeal the results of an IRS audit?
Yes. If you disagree with the IRS’s findings, you may have the right to request review by the IRS Independent Office of Appeals. Appeals must generally be filed within specific deadlines.
What records should I keep for an IRS audit?
The IRS may request tax returns, bank statements, receipts, invoices, payroll records, accounting records, mileage logs, and other documentation supporting the information reported on your return.
Can Gabaie & Associates help if I live or own a business in Rockville?
Yes. Gabaie & Associates represents individuals and businesses in Rockville facing IRS audits, appeals, and other federal tax controversies.
Where is your office serving Rockville taxpayers?
You can learn more about the firm’s office location and service area by visiting the Rockville office page or contacting Gabaie & Associates to discuss your situation.
Speak With a Rockville IRS Audit & Appeals Attorney
If you’ve received an IRS audit notice or disagree with the results of an examination, acting promptly may help protect your rights and preserve your appeal options. Whether you’re responding to a correspondence audit, preparing for a field examination, or challenging an IRS determination, understanding your legal options early can make a significant difference.
Are you in Rockville and dealing with an IRS audit or tax appeal? Contact Gabaie & Associates, LLC today at (410) 358-1500 or visit our Contact Page to get legal support today.
