Tax Audit Defense

If you have received a letter from the IRS, notifying you of an impending tax audit, you need to act immediately.

An IRS auditor will be visiting you to inspect your tax returns, accounting books, and business records. The auditor’s aim will be to determine if you have filed your tax returns correctly, properly accounting for all income, deductions, and exemptions applicable under law. They will be looking for any errors or intentional omissions that reduce the taxes you owe. Any problems will be corrected with tax adjustments (usually increases) or financial penalties, where it is found you’ve intentionally defrauded the IRS. In the worst case scenario, an IRS audit can trigger a criminal investigation against you.

Daily & Toups is a specialized tax law firm. We can help you prepare for an upcoming tax audit and represent you in person in front of the IRS.

An IRS tax audit is an intimidating process

If you have never gone through a tax audit, it’s recommended that you consult with an attorney beforehand.

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.

The consequences of an IRS tax audit

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.

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.

Filing a false tax return - felony conviction with up to 3 years in prison and a fine up to $100,000.

Lying to an IRS employee - 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.

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

You don’t have to face the IRS alone!

A tax audit is scary only if you don’t know what you’re doing.

At Daily & Toups, we’ve mounted hundreds of successful defenses against tax audits and IRS reviews.

With more than 50 years of experience dealing with the IRS, we’ve learned the ins and outs of the agency.  We have worked with the IRS to develop programs for their agents, as well as Enrolled Agents and certified CPAs.

We provide the training and counsel you need to stand up to the IRS and defend your business during a tax audit.

We can step in and take over your defense and communicate directly with the IRS agents to resolve rising problems quickly and efficiently.

Simply contact us and tell us your story. We’ll take it from there, assess your situation and present you with the options you have.

Our mission is to secure the best outcome for our clients. Where we can’t stop the IRS from imposing a penalty, we work to reduce the charges as much as possible.

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Hear from some of our clients

Mr. Daily is THE expert in his field. I've had the pleasure to work with him for over 20 years and he has always found the time to counsel and explain the best course of action.

JG | tax law assistance and counsel

Mr. Daily and his expertise helped me get out of a tax situation that could have forced the dissolution of my business and ruined my credit.

Anonymous | Representation and defense in front of the IRS

Fred assisted us through a multi year audit with ease and professionalism. His guidance was excellent and it was obvious he knew exactly how to handle the IRS

Richard | Multiyear tax audit defense

Thank you. Thank you. You got the tax lien removed and I was able to get my home re-financed.

Stephan | Removal of erroneous federal tax lien

Two years ago my finances (and life) were a mess. The IRS was on my back with tax levies of my bank accounts. Today, all of that is behind me. I can sleep at night.

Seraphina | IRS debt reduced from $200,000 to $14,700

The accountant that you warned me against tried to create endless fear as an incentive to hire him. You then helped me through the process of getting back into the tax system and not worry.

Sharon | 12 years non-filing of tax returns

Fred, I believe you function as part attorney, part therapist. You really do care about your clients.

David | IRS business audit appeal case

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