I hear from people every week who think their tax problem is the end of the world. It usually isn't. I'm Darrin Mish. I've resolved over $100 million in tax debt for clients. Here's what you should know.
You opened the mail and there it was. A letter from the IRS telling you that your return has been selected for examination. The instinct is to panic, dig out the records, and write back yourself. Do not do that.
What an IRS Audit Really Is
An audit is the IRS trying to validate or attack the numbers you reported on a tax return. Most audits in Tampa are correspondence audits, where the IRS sends letters asking for documentation on specific items. The next step up is an office audit at a local IRS office, and above that is a field audit, where a Revenue Agent comes to your home or business.
The audit is not about whether you are a good person. It is about whether your return holds up under scrutiny. The IRS auditor has a quota of adjustments to find, and your job is to make sure they do not find any that should not be there.
The Three Audit Types and What Each Means
Correspondence audits are entirely by mail. The IRS asks for documentation on specific line items. Income reporting and itemized deductions are common targets. These look the least scary but they bite when ignored.
Office audits require you to show up at a local IRS office, usually for a half day, with a defined list of records. Schedule C filers and itemized deduction heavy returns often land in office audits.
Field audits are the most serious. A Revenue Agent comes to your home, business, or representative’s office. They have authority to expand the scope of the audit while on site. Field audits typically involve larger taxpayers, business returns, and returns with significant complexity.
Why You Need a Tax Attorney and Not a CPA
This is the part most people miss. A CPA who prepared your return has a conflict of interest in your audit. The IRS is auditing the CPA’s work product. The CPA is, on some level, defending themselves. A tax attorney has no such conflict and brings something a CPA cannot bring, which is attorney client privilege.
If the audit looks like it might develop into a criminal matter, anything you said to your CPA is fair game for a subpoena. Anything you said to your tax attorney, with limited exceptions, is not.
You can also engage a tax attorney to coordinate work with the original CPA under a Kovel agreement, which extends attorney client privilege to the CPA’s work performed at the attorney’s direction. Done right, this is the cleanest way to get the technical accounting help and the legal protection at the same time.
Which Tampa Tax Attorneys Actually Do Audit Work
Audit representation is its own specialty. The Tampa tax attorneys who handle audits at a high level have several things in common:
- Direct experience with field audits and office audits, not just correspondence audits
- Working knowledge of IRS examination procedure under the Internal Revenue Manual
- Willingness to take a case to Appeals if the auditor will not budge
- Tax Court experience for the cases where Appeals does not resolve it
- A real plan for managing what gets disclosed and how
A lot of attorneys advertise audit representation. Few of them have actually carried a case from initial contact through Appeals through Tax Court. Ask.
What Happens When You Hire Audit Representation
When you hire a Tampa tax attorney to handle your audit, the first thing that should happen is a Form 2848 Power of Attorney gets filed. From that moment forward, the IRS communicates with your attorney, not with you. You do not call the auditor. You do not answer the auditor’s questions directly. Everything goes through counsel.
The attorney then takes inventory of the issues on the audit notice, requests an extension if needed, pulls the records, and decides what to produce and how to produce it. Production is not a document dump. It is a curated response, organized in a way that closes off lines of inquiry rather than opening them.
The Real Goal of Audit Representation
People think the goal of audit representation is winning. Sometimes that is the goal. More often the goal is limiting the damage. The IRS auditor came looking for adjustments. Maybe the goal is making sure they only find the ones you cannot reasonably defend, and not the ones they would have manufactured from soft documentation.
A skilled tax attorney also keeps the audit focused. If the auditor starts pulling threads on items outside the original scope, your attorney pushes back. Expanding scope is how a simple audit turns into a multi year disaster.
A Field Audit Scenario That Illustrates the Point
A Tampa restaurant owner came to us after the IRS opened a field audit on two years of his Schedule C. The Revenue Agent had already toured the kitchen, asked questions about cash handling, and requested deposit records. He was about to hand over his QuickBooks file in raw form.
We stopped that. We filed the 2848, took over communications, and reorganized the document production into a clean, prepared package that responded to the specific items on the IDR. We also negotiated the scope of the audit back to its original boundaries when the Revenue Agent tried to expand into a third year. The final audit closed with adjustments under $9,000 against an original exposure that could have been six figures if the production had gone in raw.
How My Tampa Practice Handles IRS Audits
After 32 years of representing taxpayers in Tampa, I have walked clients through every flavor of IRS audit. The Law Offices of Darrin T. Mish, P.A. handles correspondence audits, office audits, and field audits across the Tampa Bay area and nationwide. We file the Power of Attorney, take over communications with the auditor, organize the document production, and where the audit cannot be resolved at the exam level, we take it to Appeals.
The worst time to hire audit representation is the day the auditor finishes and issues the proposed adjustment. The best time is the day you opened the audit letter. Earlier is always better.
Frequently Asked Questions
How long does an IRS audit typically take?
Correspondence audits usually run 3 to 6 months. Office audits run 4 to 9 months. Field audits commonly run 12 to 24 months from opening to closure. Appeals or Tax Court adds more time.
How far back can the IRS audit?
Generally three years from the date the return was filed. The window extends to six years if there is a substantial understatement of income, and there is no time limit at all for unfiled returns or for fraud.
What triggers an IRS audit?
Common triggers include high income, large Schedule C losses, unusually high deductions relative to income, mismatched 1099 income, cash intensive businesses, and statistical scoring under the IRS DIF system.
Can I represent myself in an IRS audit?
You can, but it is rarely a good idea once there is real money at stake. The auditor is trained in interview technique and document analysis. Taxpayers without representation routinely give up information that expands the scope of the audit.
What if I disagree with the IRS audit results?
You have the right to appeal within 30 days of receiving the proposed assessment. Beyond Appeals, you can file a Tax Court petition within 90 days of a Notice of Deficiency. A tax attorney can carry the case through both stages.
Will hiring a tax attorney make the auditor more aggressive?
No. The opposite is more common. Auditors tend to handle represented cases more professionally because they know the procedural rules will be enforced and the file may end up in Appeals or Tax Court.
Get Help Now
If you are dealing with an IRS audit in Tampa and want experienced audit representation, you do not have to handle it alone. Contact the Law Offices of Darrin T. Mish, P.A. at (813) 229-7100 for a free consultation.