When you are going through an Audit, you will be contacted by an IRS agent. If you owe the IRS any taxes, they will send an IRS Revenue Officer to investigate. So, in this article we are discussing the powers of IRS Agents.
Essentially, the IRS agents are charged with ensuring the accuracy of returns submitted to the IRS. They can investigate the contents of the return and compare it to your lifestyle and records to see if you accurately reported your income. In most cases, the amount of income is not disputed. The IRS always disputes the deductions. That's why it is so vitally important to properly prepare your files for an IRS audit. You will lose your case if you don't produce the correct evidence and in the correct manner. Please see the TaxHelp Audit self-preparation program for details.
Typically, if you don't present the proper evidence to the IRS, the agent will simply disallow all the deductions. They have the power to issue summons' but it isn't necessary since you have the burden to prove your case. Although they can't enforce their summons' they can request a Contempt Citation be issued against you in US District Court for failing to respond.
The agent will also review all public records for property you own and will do an extensive background investigation on you before you even are contacted. The IRS can also summons financial information about you from your banks, employers and lenders. They will scrutinize all Federal loan documents you have made to check against the income you claimed on your return. It is common to portray income as high to obtain a loan but very low for income tax purposes. The IRS knows this and will check the records. The lender will not appreciate that you lied to obtain the loan.
Even though an audit may seem benign the far-reaching implications can cause real future problems for you. So, in all IRS procedures, especially an IRS Audit, it is vitally important to secure a tax attorney to preserve the attorney-client relationship and properly advocate your case to the IRS.
J. David Hopkins
