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What Is Tax Audit Defense?

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  • Written By: Alex Newth
  • Edited By: Angela B.
  • Last Modified Date: 01 December 2016
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Every year or quarter year, U.S. citizens with jobs must submit tax forms to the Internal Revenue Service (IRS). If the IRS believes the information is fake, such as declaring questionable deductions or if the income on the tax form does not match the income from work, the agency will initiate an audit. The IRS will ask for further paperwork to verify that the taxpayer declared the correct amount of income or deductions and may increase the amount of tax the person has to pay. Tax audit defense, which is offered by some tax foundations, defends the taxpayer’s information and attempts to keep the client from having to pay additional taxes.

Tax audit defense, in the simplest terms, is a service offered by tax lawyers and accounting businesses to defend the taxpayer against an audit. Each business offers a slightly different type of tax audit defense, but most of them will defend the taxpayer’s income and deductions and will assist the taxpayer through the appeal process. The defense will also be at each audit appointment, will review the tax return for any potential problems, and will handle IRS correspondence.

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During the entire tax audit, the defense will be on the client’s side to help him or her. Audits are scary for many taxpayers, so a tax audit defense helps the taxpayer by calming him or her down and ensures that all the information is correct and accounted for. The defense will also prepare a strategy to assist the taxpayer.

Most taxpayers are ignorant of the many U.S. tax laws. A tax audit defense by a business or person who knows the tax laws can keep the taxpayer from having to pay more and from getting into further trouble. The defense also will often help organize records to prove the taxpayer did not falsify information.

If the tax audit defense is unable to calm the IRS during audit meetings, the defense will then prepare a petition for the tax court. This petition sometimes goes through and the taxpayer will not have to pay a penalty. Other times, the petition fails and the taxpayer will be forced to pay a higher tax amount.

The defense, if this happens, will still try to help the taxpayer. He or she will help organize any records, collect information and attempt to minimize the additional tax. Some tax audit defense services will loan the extra money to the client if the client is unable to pay. As with any other loan, the taxpayer will have to pay this amount back to the audit defense.

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