Receiving notice that the IRS plans to audit your tax return or challenge a tax issue can be stressful. Whether you’ve been selected for an examination or disagree with an IRS determination, understanding your rights and responding strategically can help protect your financial interests.
At Gabaie & Associates, we represent individuals and businesses in Annapolis during IRS audits and appeals. Our goal is to help clients navigate the process, resolve disputes efficiently, and pursue the most favorable outcome possible.
Need guidance with an IRS audit or appeal? Contact Gabaie & Associates, LLC at (410) 358-1500 or visit our Contact Page to discuss your situation.
What Is an IRS Audit?
An IRS audit is a review of your tax return to determine whether income, deductions, credits, and other reported information are accurate.
Being selected for an audit does not necessarily mean you’ve done anything wrong. Many audits result from routine screening, document mismatches, or specific issues identified by the IRS.
Depending on the circumstances, the IRS may request additional documentation, clarification, or supporting records before making a final determination.
Why Does the IRS Audit Tax Returns?
The IRS may select a return for examination for several reasons, including:
- Income reported by third parties does not match your return
- Significant business deductions or expenses
- Large charitable contributions or unusual deductions
- Self-employment income
- Cryptocurrency or digital asset transactions
- Rental property or investment activity
- Random compliance reviews
In many cases, the audit simply gives the IRS an opportunity to verify the information reported on a return.
What Types of IRS Audits Are There?
Not every audit follows the same process.
Correspondence Audit
The IRS requests documentation through the mail regarding specific items on a tax return.
These audits are generally limited in scope but still require accurate and timely responses.
Office Audit
The taxpayer meets with an IRS examiner at a local IRS office to review requested records and answer questions about the return.
Field Audit
Field audits are typically the most comprehensive. An IRS revenue agent conducts the examination at a home, business, or professional office.
These audits often involve businesses, high-income individuals, or more complex tax matters.
What Should You Do If You Receive an IRS Audit Notice?
If you receive an audit notice, avoid ignoring it or sending documents before fully understanding what the IRS is requesting.
Instead:
- Read the notice carefully.
- Identify the tax years involved.
- Gather the requested records.
- Understand the issues under review.
- Consider speaking with an experienced tax attorney before responding.
Providing incomplete or inaccurate information can sometimes expand the scope of an audit or create additional questions.
How Can a Tax Attorney Help During an IRS Audit?
IRS audits often involve more than simply providing documents.
A tax attorney can help:
- Review the IRS notice
- Explain your legal rights
- Communicate with the IRS on your behalf
- Organize supporting documentation
- Respond to requests for additional information
- Help limit unnecessary expansion of the examination
- Develop strategies for resolving disputed issues
Professional representation can also help reduce misunderstandings and ensure responses are complete and properly documented.
What Happens If You Disagree With the IRS?
Not every audit ends with the taxpayer agreeing to the IRS’s findings.
If you disagree with the proposed changes, you may have the right to challenge the decision through the IRS appeals process.
Many disputes are resolved without litigation through administrative review.
Understanding your available options early can help preserve important appeal rights and deadlines.
What Is an IRS Appeal?
An IRS appeal allows taxpayers to request an independent review of certain IRS decisions without immediately going to court.
The IRS Independent Office of Appeals reviews disputes with the goal of resolving cases fairly based on the facts and applicable tax law.
Appeals may involve disagreements over:
- Audit findings
- Penalties
- Collection actions
- Certain tax assessments
- Other qualifying IRS determinations
For many taxpayers, an appeal provides an opportunity to resolve disputes more efficiently than formal litigation.
When Can You File an IRS Appeal?
The timing depends on the type of IRS notice you’ve received.
In many situations, taxpayers have a limited window to submit an appeal after receiving a determination or proposed adjustment.
Missing these deadlines can significantly reduce your available options.
For that reason, it’s important to review IRS correspondence promptly and understand what response deadlines apply to your situation.
Common Issues That Lead to IRS Appeals
Taxpayers pursue appeals for many reasons.
Common examples include:
- Disputed business deductions
- Unreported income issues
- Employment tax matters
- Penalty assessments
- Collection disputes
- Offer in Compromise determinations
- Trust Fund Recovery Penalty cases
- Audit adjustments involving valuation or documentation
Each appeal requires careful analysis of both the facts and the applicable tax law.
IRS Audits and Appeals for Annapolis Taxpayers
Individuals and businesses throughout Annapolis may face audits for a variety of reasons, from self-employment income and investment activity to closely held businesses and real estate transactions.
Whether you live in Eastport, Murray Hill, Parole, Cape St. Claire, or operate a business in downtown Annapolis, responding promptly to an IRS audit notice can often help preserve your options and reduce unnecessary complications.
An audit does not automatically result in additional taxes owed. In many cases, taxpayers simply need to provide documentation or clarification to resolve the IRS’s questions. When disagreements arise, the appeals process offers another opportunity to seek a fair resolution before considering litigation.
What Happens If You Ignore an IRS Audit Notice?
Ignoring an IRS audit notice can lead to additional tax assessments, penalties, and interest — even if the original issue could have been resolved with documentation or clarification.
Depending on the circumstances, the IRS may:
- Disallow deductions or credits
- Assess additional taxes
- Impose accuracy-related penalties
- Continue collection efforts if a balance becomes due
- Expand the scope of the examination in certain situations
Responding promptly helps preserve your ability to explain your position and provide supporting evidence before the IRS reaches a final determination.
Can an IRS Audit Lead to an Appeal?
Yes. If you disagree with the results of an audit, you may have the right to request an administrative appeal before the matter proceeds to litigation.
Many taxpayers assume an audit decision is final, but that is not always the case.
An appeal provides an opportunity for an independent review by the IRS Independent Office of Appeals, which evaluates the facts, applicable law, and supporting documentation. In many cases, disputes can be resolved through this process without the expense and time involved in going to court.
Why Work With a Tax Attorney During an IRS Appeal?
IRS appeals often involve legal interpretation, documentation, and negotiation—not simply completing forms.
An experienced tax attorney can help:
- Evaluate the strengths and weaknesses of your case
- Prepare a well-supported appeal
- Present legal and factual arguments effectively
- Communicate with the IRS throughout the process
- Negotiate potential resolutions
- Protect your rights if additional legal action becomes necessary
Whether the dispute involves audit findings, penalties, or other tax issues, experienced representation can help ensure your case is presented as clearly and thoroughly as possible.
Resolving IRS Disputes Before They Escalate
Many tax controversies can be resolved without lengthy legal proceedings when addressed early.
After reviewing your circumstances, a tax attorney may recommend options such as:
- Providing additional supporting documentation
- Correcting factual misunderstandings
- Negotiating a settlement through the appeals process
- Requesting penalty relief when appropriate
- Pursuing alternative tax resolution strategies if a balance remains due
Every case is unique, and the best approach depends on the issues involved, the available evidence, and your long-term financial goals.
Frequently Asked Questions
How long does an IRS audit take?
The length of an audit depends on its complexity. Some correspondence audits may be resolved within a few months, while field audits involving businesses or high-value assets can take considerably longer.
Can I represent myself during an IRS audit?
Yes, but many taxpayers choose professional representation, particularly when significant tax liabilities, business interests, or complex legal issues are involved.
What happens if I disagree with the results of an IRS audit?
You may have the right to challenge the findings through the IRS Independent Office of Appeals before pursuing litigation, depending on the type of determination and applicable deadlines.
Can an IRS appeal reduce penalties or additional taxes?
Potentially. If the facts or law support your position, the appeals process may result in changes to the IRS’s proposed adjustments, penalties, or other determinations.
Do you represent both individuals and businesses in Annapolis?
Yes. Gabaie & Associates represents individuals, business owners, professionals, and organizations throughout Annapolis in IRS audits, appeals, and other federal tax controversies.
Speak With an Annapolis IRS Audit & Appeals Attorney
Facing an IRS audit or challenging an IRS determination can feel overwhelming, but you don’t have to manage the process on your own.
Whether you’ve received an audit notice, disagree with the IRS’s findings, or need guidance through the appeals process, Gabaie & Associates can help you understand your rights and evaluate your options.
If you’re in Annapolis and need assistance with an IRS audit or appeal, contact Gabaie & Associates, LLC today at (410) 358-1500 or visit our Contact Page.
