Any audit or denial by the IRS on any OIC can be complex and highly stressful to the taxpayers of Salt Lake City and beyond. Mastering the details of the process coupled with the understanding of how to appeal effectively is a very important step in bringing resolution to tax disputes with the IRS. In this in-depth discussion, details of the IRS audit Salt Lake City, denials of Offers in Compromise, and the appeals processes will be covered with special emphasis on lawyers for tax audits who are knowledgeable with regards to the IRS.

Understanding IRS Audits

An IRS audit is an examination of the financial information and tax returns of either an individual or business to ensure accuracy and compliance with the tax laws, including discrepancies in reported income and unusual deductions or random selection by the IRS. Confronting an audit typically leaves one with the fearful perception of having to deal with the IRS, which proves very overwhelming, even in Salt Lake City.

Types of IRS audits

1. Correspondence Audit:

This is the least intrusive of the audits, where the IRS requests clarification or additional documentation via mail. 

2. Office Audit:

Conducted in an IRS office, typically on a more substantive review of records and documentation.

3. Field Audit:

This is the most comprehensive form of audit, and hence, the taxpayer attends in person at his place of business or home. An IRS agent examines all the taxpayer’s financial records in detail.

Steps in an IRS Audit Process

1. Notification:

Letters of Audit are sent to the taxpayer, in which the IRS points out the details in the tax return that are under scrutiny and requires certain documents to be furnished.

2. Gathering Records:

This will involve all source documents, such as receipts, invoices, bank statements, and income tax returns, which are realization-based in nature and are collected to support the income, deductions, and credits claimed.

3. Meeting or Response Required:

The type of audit dictates whether taxpayers will meet with an IRS agent, respond to questions by mail, or both.

4. Result:

At the end of the audit, the IRS will accept your return as filed, propose adjustment as additional tax due, or refund any overpayment.

Issues Which May Occur and Options Throughout the Audit Procedure 

Complexity of Tax Laws:

 The correct following and application of income tax laws can be very challenging for complicated financial situations.

Representation:

Taxpayers have the right to representation in an audit, and hiring a seasoned tax attorney for an IRS audit can provide expert guidance and negotiation skills.

Appeals:

If not satisfied with the audit findings, taxpayers can appeal to the IRS or litigate their case in Tax Court.

Offer in Compromise Denials

An Offer in Compromise is a settlement alternative for taxes payable in full for those who have no capacity to pay. Through this program, one can get a settlement for less than the fully owed amount when financial hardship or other conditions are proven. However, OIC applications are usually denied, either because of the strict IRS criteria or because most of the submitted offers are incomplete.

Reasons for OIC Denials

1. Ineligibility:

One’s inability to satisfy the IRS while meeting obligations, such as current filing and payment, or the capability of earning the amount proposed.

2. Incomplete Documentation:

There may not be adequate financial information or supporting documentation to prove a reasonable doubt regarding collectibility.

3. Non-compliance:

Failure to comply with past, present, or future tax laws, including unfiled returns or failure to make current or future required tax payments.

Appealing a Denial of Offer in Compromise

If an Offer in Compromise is denied, taxpayers have the right to appeal this decision within the IRS. Understanding the process of appeal and providing additional documentation or clarifications will help in strengthening the appeal.

Steps in Appealing an OIC Denial

1. Review Denial Letter: 

The IRS sends a denial letter with reasons listed for denial.

2. Appeal of Offer: 

Submit Form 13711, Request for Appeal of Offer in Compromise, with a detailed explanation and other documentation, if any.

3. Appeal Process:

The IRS Appeals officer shall re-evaluate the application based on the information presented by the taxpayer seeking appeal.

4. Settlement or Further Action:

Depending on the result of your appeal, the IRS will either accept the Offer in Compromise, suggest a new agreement with modified terms, or stand by their denial.

Role of Tax Attorneys on Matters before the IRS

IRS tax audit attorneys are knowledgeable in IRS affairs, which will prove advantageous to both. Such professionals bring invaluable expertise in IRS audits and Offers in Settlement Appeals. They understand the intricacies involved in the Internal Revenue Service’s tax laws and procedures, providing strategic guidance and advocacy to protect taxpayers’ rights while returning favourable results.

Benefits of Hiring a Tax Attorney

1. Domain Knowledge: 

IRS tax audit lawyers have specific knowledge about the tax laws and IRS regulations that they apply and interpret appropriately in complicated matters.

2. Negotiation Skills:

An experienced lawyer can negotiate with the IRS settlement agent or other appeals officers to compromise on any sum for their client’s benefit.

3. Representation: 

They represent the taxpayer at all stages, whether an audit, appeal, or trial. This relieves the stress and difficulty of elevating work face-to-face against the IRS.

4. Compliance: 

Ensuring the taxpayer is in compliance with tax laws and regulations throughout the pendency of an audit or an appeal.

Choosing the Best Tax Attorney in Salt Lake City

In choosing a Salt Lake City Tax lawyers to represent you before the IRS for any IRS audit or Offer in Compromise appeals in Salt Lake City, one should look at whether an attorney has handled a good number of cases with the IRS and if they have recorded successful cases.

– Specialization: 

Make sure that he is an attorney who deals with tax law and further specializes in audits, appeals, or OICs.

– Reputation: 

Enquire from friends and people as to his reputation and professionalism. Read through client reviews and testimonials, or seek referrals.

– Communication: 

Ensure that he keeps you updated regarding the progress of your case clearly.

Bottom Line

Navigating audits from the IRS or appeals of Offers in Compromise denial can be quite complex, but a little knowledge and professional help can go a long way in finding adequate solutions. Through an outline of the audit process, reasons for OIC denials, and the role that IRS tax audit attorney play, this information will arm individuals and businesses with the means to protect their rights and know how to find positive solutions with the Internal Revenue Service. Be it an audit or a reconsideration of an Offer in Compromise, a very competent tax attorney like Tax Law Center should be consulted to help you make informed decisions along the way.