Tax Audit Defense

Daily, Montfort & Toups is a leading tax law firm. Our tax attorneys have more than five decades of experience standing up to the IRS and helping clients resolve their tax problems. Our tax services include audit defense, IRS appeals, unfiled tax returns, CID investigations, enforced collections – liens, levies and more. Learn more about our tax audit services below.


A tax audit is a serious step by the IRS. Anybody can be selected for an audit and it doesn’t necessarily mean that you’ve done something wrong. However, if the IRS wants to dig into your records you have to prepare for all scenarios.

Five out of seven people who are audited by the IRS owe additional taxes. If the audit finds severe errors in your tax records, you can receive a civil penalty on top of the taxes and interest you owe.

Usually, auditors come clueless and it’s their job to extract as many details from you as possible. Your performance during the audit is crucial. If you’re not properly prepared to handle the interview, you may end up doing more damage than helping your case. The best thing you can do is to start working on your defense as soon as you get wind of a tax audit coming your way.

You need to review your business records and accounting and clean any obvious errors you could find. If you can spot them, so will the auditor.

You must remain collected and keep your composure during the interview. The auditor may fire all kinds of questions about your business and personal life.

The sole purpose of an IRS interview is to catch you doing something wrong. The auditors are trained to interrogate you in such ways that you unintentionally give away information. They will look for clues in your behavior and cross-reference your statements to find out if you’re hiding something.

  • How you respond to questions
  • How you act
  • What clothes you wear
  • How fancy is your office or home
  • What car you drove to the interview

These things will give the IRS information about you. You may not think they are relevant, but the IRS excels at piecing the bigger picture from the bits you provide them with.

Does it sound intimidating? That’s what the IRS wants. The auditor can be cold, heartless and scary. It’s their job to come in and bully you until you cave in and tell them everything they want to hear.


Depending on the case, the consequences of an IRS tax audit can vary greatly. By default, if you have diligently filed and paid all of your taxes, there is nothing to fear and the auditor will simply confirm everything is in order.

Unfiled tax returns, unaccounted income, improper use of tax deductions and exemptions will result in an adjustment of tax. The IRS is going to calculate owed tax based on all found discrepancies in earned and reported income. There is no limit. Interest will be assigned to all tax from the time it should have been paid until today and will continue running indefinitely.

Finally, depending on the case, a variety of penalties can be added:

  • Filing late tax returns – civil penalty up to 25% of owed taxes.
  • Errors and discrepancies in tax returns – civil penalty up to 20% of owed taxes.
  • Filing a false tax return – felony conviction with up to 3 years in prison and a fine up to $100,000.
  • Criminal conviction of tax evasion and fraud – up to 5 years in prison and a fine up to $100,000.
  • Intentional tax evasion and fraud – civil penalty of 75% of owed taxes.
  • Failure to file your tax returns AT ALL – 1 year in prison and a fine of $25,000 for each year you didn’t file a tax return
  • Lying to an IRS employee – up to 3 years in prison and a fine up to $100,000.

If any of the above apply to you, contact a tax attorney immediatelly to verify and discuss the available options!

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