Should I Get a Tax Lawyer to Handle an IRS Audit?
While most tax audits are easily resolved, hiring a tax lawyer is sometimes in your best interestBy S.M. Oliva | Reviewed by Canaan Suitt, J.D. | Last updated on January 18, 2024
Use these links to jump to different sections:
- IRS Audits Are Rare
- Most Tax Returns Are Randomly Selected
- Most Audits Are Conducted By Mail
- When An In-Person Audit May Be Necessary
- When Is It Beneficial to Hire a Tax Attorney for an Audit?
- Find an Experienced Tax Attorney
Each April, taxpayers file their federal tax returns, most hoping for a big refund. For a select few, however, the response from the Internal Revenue Service (IRS) is not a check but a notice of a tax audit. Although the word “audit” conjures up horror stories of federal agents busting down your door, the actual process is far more civil—and potentially beneficial—than you may think.
“Whenever someone gets that letter from the IRS, it feels like a personal attack, so you have to walk back from that,” says Michael T. Mazzone, a tax law professional in Chicago. “I’m not necessarily saying that feeling is wrong, but ultimately, you have to look at it from a cost perspective. How much money and time will this cost you?”
IRS Audits Are Rare
The first thing to understand about audits is that they are actually quite rare, especially for the average taxpayer who does not have much income beyond their regular wages. In fact, less than 1 percent of individual income tax returns are selected for an IRS audit each year.
Most Tax Returns Are Randomly Selected
Even if you are in the 1 percent of taxpayers to receive an audit notice, you shouldn’t assume the IRS office thinks you have done something wrong. Most returns are selected by audit based on random selection and computer screening.
The IRS uses a statistical formula to compare returns against the “norm” for a given group. Once a tax return is identified by the computer, an IRS auditor conducts a personal examination.
Most Audits Are Conducted By Mail
Only if the auditor finds something “questionable,” such as an apparent discrepancy, is an audit triggered. Even then, the taxpayer may not have to personally appear before the IRS. Most types of IRS audits are conducted by mail.
Typically, the auditor will request additional information from the taxpayer, such as receipts to support a particular deduction. In many cases, simply providing this additional information to the IRS will satisfy the auditor’s concerns. There are even cases where an audit reveals the taxpayer is entitled to an additional tax refund.
When An In-Person Audit May Be Necessary
If the IRS agent requests a significant amount of information—more than you can reasonably provide by a correspondence audit—an in-person or field audit may be necessary.
At this point, if not before, you should consider hiring a tax attorney. Working with a tax attorney is especially important if you disagree with the result of the IRS audit. You have the right to seek review of an auditor’s determination with IRS management and, if necessary, the IRS Office of Appeals or the U.S. Tax Court.
“You really want to be proactive with the IRS as much as possible,” Mazzone says. “There are a lot of deadlines that, if you let them pass, it will immediately close the case and send it to appeals or they’ll immediately assess.”
When Is It Beneficial to Hire a Tax Attorney for an Audit?
The biggest benefit of a tax attorney is familiarity with the system and institutional knowledge of the IRS. “Any time that goes by where you don’t respond appropriately or don’t have enough knowledge to make the right first impression, that can be big,” Mazzone says. “A professional will know how to manage the conversation and limit the scope of the audit to what the IRS is looking for. You don’t want to open yourself up to a larger-scope audit.”
Worrying about cost is an understandable concern, Mazzone says, but any reputable attorney, CPA, or tax professional will level with you from Day 1. “You want to find a professional who’s upfront right from the beginning. It can get very expensive because it can be a lot of work. But if the assessed tax liability is minimal, you want a lawyer who says it’s worth doing a cost analysis and figuring out if it’s worth seeking representation, just paying it, or trying to work on portions of it yourself.”
Mazzone works with a lot of clients in this piecemeal fashion to make sure it’s best for their individual needs. “Sometimes I say, ‘just pay it,’ and other times it’s, ‘I’ll work with you on this specific issue because it can save you a lot of time and money.’”
Find an Experienced Tax Attorney
Visit the Super Lawyers directory to find an experienced tax lawyer in your area for help with the audit process or other tax problems. If you want more information on this area of tax law, see our tax overview.
Additional Tax articles
- What is Tax Law?
- Does My Remote Business Need to Collect Sales and Use Taxes for Other States?
- Am I in Trouble if I Receive an IRS Audit Notice?
- What Business Owners Need to Know About Trust Fund Taxes
- Do I Need a Tax Attorney When I Have an Accountant?
- Do I Have to Report Bartering Income on My Taxes?
- Expats Still Must Pay U.S. Taxes
- What Should You Do When You Get an IRS Audit Notice?
- How a 529 Plan Can Maximize Savings for College
- What Happens if You Don't Pay Your Taxes?
State Tax articles
Find top lawyers with confidence
The Super Lawyers patented selection process is peer influenced and research driven, selecting the top 5% of attorneys to the Super Lawyers lists each year. We know lawyers and make it easy to connect with them.Find a lawyer near you