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Can you have legal counsel during an IRS audit?

On Behalf of | Jan 6, 2023 | Tax Controversies |

Few life events are likely to cause you more consternation than an Internal Revenue Service audit. After all, an auditor might find problems with your tax return, potentially exposing you to stiff penalties. Fortunately, though, according to the IRS, tax audits remain comparatively rare, especially for individuals without substantial income.

Unless you are a tax lawyer or certified public accountant, an IRS auditor is likely to know much more about your tax obligations than you do. Luckily, it is usually acceptable to have your own legal counsel during an IRS audit. Here are a couple of reasons you might want to have a tax attorney on your side.

Your audit is not random

It might be tempting to think your audit is just a product of bureaucratic randomness. That probably is not the case, however. After all, the IRS uses sophisticated algorithms to find tax returns to audit. These algorithms tend to overweight suspected unreported income. Because an auditor might have details you do not know, it is advisable to have independent legal counsel.

You do not want to turn over too much

The IRS employs tax professionals who know how to spot problems. They also have extensive experience collecting information and auditing returns. You might not have to turn over everything an auditor requests, though. If you turn over too much, an auditor might find additional issues. Obviously, a skilled tax lawyer knows what you must and may not have to give to the IRS.

Ultimately, even though hiring a tax attorney to help you through your IRS audit may seem like an unnecessary burden, it is hard to overstate the value of having an experienced one on your team.