Losing the battle with an IRS tax audit can cripple your financial welfare for life. It is extremely helpful (and oftentimes crucial) to seek the professional help of a tax attorney in order to safeguard your financial future.

For those who are unsure whether they want to hire a tax lawyer, there are some helpful “Do’s” and “Don’ts” until you make a final decision on whether or not to seek professional tax representation.

Nolo.com has a very good (if slightly flawed) taxes and audit section (http://www.nolo.com/resource.cfm/catid/e60b9a45-4b75-424c-91cddac9f6ab3a18/213/287/). Here you’ll get solid tax advice like:

Don’t answer unless asked. Give the auditor no more information than she is entitled to, and don’t talk any more during the audit than is absolutely necessary. Don’t give copies of other years’ tax returns to the auditor. In fact, don’t bring to an audit any documents that do not pertain to the year under audit, or were not specifically requested by the audit notice.

Know your rights. Browse IRS Publication 1, explaining the Taxpayers’ Bill of Rights, prior to your audit. If the audit is not going well, demand a recess to consult a tax pro. Ask to speak to the auditor’s manager if you think the auditor is treating you unfairly. If the subject of tax fraud comes up during an audit, don’t try to handle it yourself.

Appeal the results. When you get the examination report, call the auditor if you don’t understand or agree with it. Meet with her or her manager to see if you can reach a compromise. If you can’t live with an audit result, you may appeal within the IRS or go on to tax court.

In addition, you may also find that Roy Lewis at Motley Fool is very helpful. (http://www.fool.com/personal-finance/taxes/how-to-survive-an-irs-audit.aspx) Roy likens going into an IRS audit without a tax lawyer to “removing your own appendix,” but he offers a few nuggets of IRS advice including:

Organize your records. Making the auditor’s job easier will win you some points. The auditor will at least believe that you’re an organized person and that all of your items are documented and justified. Don’t be afraid to group the items in question, or attach an adding-machine tape that matches the tax return. That will allow the auditor to quickly review the important issues. Don’t believe those who tell you that you can just throw your records in a bag, drop it on the auditor’s desk, and shout, “You figure it out!” That just doesn’t work. Remember, it’s your legal responsibility to prove your deductions.

Replace missing records. If you’re going through your records and find that some of them are missing, call for duplicates immediately. Don’t just go to the audit and claim that the records are missing or lost. That does you no good at all. At best, the auditor will request that you obtain the records. At worst, the deduction in question will be denied, since there are no supporting documents.

Provide only copies. Don’t bring original documents to the audit. If you do bring originals, do not give them to the agent. Request that the agent make copies and give the originals back to you. Once you hand over your original documents, there’s a very good chance that they will be misplaced or lost. Then you’re the one left holding the bag, since the IRS isn’t responsible for documents lost in its possession.

While it may be tempting to try these “Do It Yourself” remedies, you may end up saving more money by hiring a professional tax attorney than trying to battle the IRS on your own.

The cash you “save” by not hiring a reputable tax attorney may be the most expensive money in your life. And you may have a long time to consider the cost of going it alone as you write big checks to the government for the rest of your life or worse yet, repenting at leisure while you’re pumping your biceps in the prison yard. It’s your call.

Read the full press release for more IRS tax tips

Feel free to contact our specialized staff of tax attorneys, CPAs, EAs and tax professionals. Visit the Tax Resolution Services web site  for a free tax relief consultation or call us at 866-IRS-PROBLEMS.

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This entry was posted on Wednesday, July 29th, 2009 at 3:57 pm and is filed under Seeking Professional Tax Help, Tax news and tips. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.