WHAT TAXPAYERS NEED TO KNOW
NAVIGATING A TAX AUDIT
Preparing and understanding a tax audit is complex and essential to the success of your case. We've put together
this flow to help Taxpayers better understand the problem, the process of a tax audit, the context, and how the
Audit Defense Package can provide exceptional results to your tax audit case.
THE PROBLEM
With 1.25 million IRS tax audits, 1.5 million California audits and 700,000 New York State tax audits each year, you are not alone. There are currently record high numbers of tax audits in the United States.
California, New York State, and Pennsylvania State Governments have just recently revamped their audit programs and are more aggressive than ever before.
When you receive an audit letter from the IRS, California, New York State, Pennsylvania, or another state or any governmental auditing entity:
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You need to respond within a limited time frame.
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Your response must be in an organized manner and in a format which is easily understandable to an auditor.
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You have no reference materials.
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You have no experience doing this.
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The clock is ticking.
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You feel stressed and anxious.
Whether you
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Handle this yourself (not a good idea)
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Engage a Tax Professional
you still must assemble your records in an organized and coherent format. If you have hired a Tax professional that has told you vague, unspecific and unhelpful directions like “Assemble your documents,” the Audit Defense Package can guide you.
What is the “Process?”
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You have 60 days to respond to the audit letter.
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The Audit Review. They have 90 days (3 months) to respond.
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The Protest for California or Conciliation Conference for New York, informal meetings to discuss any areas of disagreement.
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An Audit Appeal, where you can present additional evidence, if you feel you did not get fair treatment.
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Tax Court, where you or your representative can discuss the case and negotiate with a government lawyer.
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A tax court trial, only if you feel that you did not get justice.
IMPORTANT NOTES:
Why do you need 2 exact copies? The government will scan your information, and then shred it. Your taxpayer’s original is all you will have to support you later.
If you did not purchase the package and the Protest or Conciliation Conference did not have a favorable outcome, this package is designed to strengthen your defense and is the best way to bolster your defense for the Audit Appeal or Tax Court.
THE PROCESS
If you do a good job on this first step, it is more likely that you will get a good result, and not need to go further into the process, to a Protest or Conciliation Conference.
The Audit Defense Package will prepare you for ALL STAGES of the Audit, and is useful at every stage.
THE SOLUTION: THE AUDIT DEFENSE PACKAGE
The best, most powerful, most efficient solution to tax audit problems.
The Audit Defense Package is the first and only product of its kind in the United States.
When you purchase the Audit Defense Package, you will get all the information you need to stay informed and organized during the tax audit process. For each specific tax deduction, we include crucial explanations and worksheets for your deductions, along with the specifics of what is required and how it should be displayed, in a schedule already structured and printed for you.
THE CONTEXT
Can I just concede to the government, right now, and not fight this battle? This looks like a big hassle and not doing anything will just cost me a few hundred dollars.
WRONG!
Deductions have different requirements for documentation that vary by section. Some simply require you to have a certain governmental form for proof, while others require more details to be explained. The Audit Defense Package outlines all the places where more requirements need to be met and even fills in many of them for you.
If you DO NOT prove the deductions you have claimed, or you attempt and fail to document the deductions you claimed, this is what happens:
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They will disallow the claimed deductions, recalculate what you owe, and send you a bill.
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They can make a similar adjustment to the income tax returns you filed for the two previous tax years!
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The State will send notice of the adjustments to the IRS, for all three years. The IRS will send you a bill for additional taxes owed.
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Penalties and Interest: You will be assessed interest at the rate of approximately 3% per year, calculated from the date the taxes were originally due to be paid.
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At the State Government level only, they may put a flag on the return for this specific issue and only for next year.
EXAMPLE CALCULATION: Your State return shows a $900 refund. The State says you owe them $100. The issue is not $100. It is $1,000! If the issue with the State is $1,000, you may owe the IRS $3,000, for a total of $4,000. Add only $1,000 for penalties and interest and the total can be $5,000. That is for 1 year. [The State can make a similar adjustment for the previous 2 years.] Multiply by 3 years = $15,000 - an expensive potential problem!
Ignoring the problem will cost much more than going through the process.