Few things instill fear or frustration like getting audited by the IRS or the California Franchise Tax Board. These are understandable emotions, but they can sometimes lead to decisions that aren’t the wisest.
But before we get into why you should talk to an attorney if you get audited, let’s make one thing clear: you don’t usually need an attorney to handle most audits. But that doesn’t change the fact that it’s often a good idea to speak with an attorney when you learn about a tax audit. The following is a list of reasons why it’s smart to contact a tax lawyer when you find out you’re being audited.
Reason #1: You Don’t Know What You Don’t Know
If you get audited, are you sure as to why? Is your audit one where the IRS just needs you to submit receipts that support the numbers you reported on your tax return? Or does the IRS think you might have engaged in tax fraud or tax evasion?
A tax attorney looks out for what you don’t know. They might spot legal issues that you weren’t even aware of. Alternatively, they could review your situation and confirm that it’s straightforward and something you can handle on your own. You won’t know until you have a consultation with a tax attorney.
Reason #2: You Have Complex Tax Issues
Sometimes you need a lawyer to help you understand the seriousness of your situation. Other times you already know you have a serious situation and need a tax lawyer to get you through it. Yes, there’s a chance that you could do the legal and tax research yourself, but a tax lawyer can do it more effectively and quickly.
Also, you’ll have the added benefit of being able to sleep at night. That’s because you’ll know you had a tax professional figure out your complicated tax question as opposed to wondering if you missed something.
Reason #3: They Can Talk to the IRS or Taxing Authority on Your Behalf
Depending on how busy you are, as well as how comfortable you are communicating with the IRS, one advantage of hiring an attorney for an audit is that they can deal with the IRS directly. Not only is this convenient, but it reduces the risk of you revealing more information than you need to.
Reason #4: Attorney-Client Privilege
Some of the communications between a client and accountant may be protected in certain situations. But the attorney-client privilege is far more robust. This makes it easier to keep what you say to your tax professional confidential from IRS investigators.
Reason #5: Your Tax Audit Could End Up In Litigation
If you find yourself going up against the IRS in Tax Court, you usually want a tax attorney to represent you. But do you need a tax attorney before heading to court? It’s hard to say for sure, as every case is different.
However, if your audit is one where there’s a decent chance you could end up in court, it might be best to talk to a tax lawyer as soon as possible. Not only is your tax problem complex enough to warrant such expertise, but they can help guide you through the audit process so that you are in the best legal position when litigating begins. They’ll also already be familiar with your case when litigation commences. This can help them represent your interests more effectively and economically.
Reason #6: You’ve Got Little to Lose
One of the major perceived drawbacks to contacting a tax lawyer is the thought that it’ll be expensive to hire them. That may or may not be true, but many tax attorneys, including The Law Offices of LaDonna T. Kienitz, will offer free case evaluations. This gives you the cost-free opportunity to learn if hiring an attorney is a good idea or not.
The good news is Kienitz Tax Law is here to help you with your tax issues. Schedule your FREE consultation today!