While an accountant can be a valuable resource for a small business, there are several potential problems with relying solely on an accountant to deal with an IRS tax audit, including the following:

No legal privilege: Communications between a business and its accountant are not protected by the attorney-client privilege, which means that the IRS may be able to access these communications during the audit. Lack of negotiating skills: An accountant may not have the negotiating skills to effectively represent the business during an audit and resolve any discrepancies or disagreements with the IRS auditor. Limited scope of services: An accountant may not be equipped to handle more complex legal issues that may arise during an audit, such as criminal tax matters or tax disputes. By retaining an attorney in addition to an accountant, a small business can have the best of both worlds: the accountant's expertise in tax and financial matters combined with the attorney's legal expertise and ability to represent the business during an audit. An attorney can help ensure that the business's rights are protected, that any legal issues are properly addressed, and that the audit is resolved in the most favorable way possible.

An attorney can help a small business defend an IRS audit in several ways, including:

Preparation: The attorney will review the business's records, including financial statements, tax returns, and other documentation, to ensure that everything is in order and to identify any potential weaknesses or red flags that may prompt an audit. Representation: The attorney will represent the business during the audit, communicating with the IRS auditor and negotiating on behalf of the business. The attorney will also ensure that the business's rights are protected throughout the audit process. Documentation: The attorney will provide the IRS auditor with any necessary documentation, including receipts, invoices, and other supporting materials to prove the legitimacy of the business's deductions and income. Negotiation : If there are any discrepancies or disagreements during the audit, the attorney will negotiate with the IRS auditor to resolve the issue and reach a fair resolution. Appeal: If the business disagrees with the outcome of the audit, the attorney can assist with filing an appeal and representing the business during the appeals process. By working with an experienced attorney, a small business can have peace of mind knowing that its interests are being protected and that it has a strong advocate on its side during the IRS audit process.

There are several potential weaknesses or red flags that may prompt an IRS audit for a small business, including:

Inconsistent reporting: If the business's tax returns, financial statements, and other reporting are inconsistent or contain errors, this may prompt an audit. Large deductions: If the business claims large deductions, especially those that are significantly higher than those claimed by other businesses in the same industry, this may raise a red flag and prompt an audit. Home office deduction: The home office deduction can be particularly scrutinized, so it is important to ensure that the business is properly claiming this deduction and that all requirements are met. Cash transactions: A high volume of cash transactions may raise a red flag, as it can be difficult to properly track and report cash income. Unreported income: If the business fails to report all of its income, this can raise a red flag and prompt an audit. Round numbers: Reporting income and expenses in even dollar amounts, or "round numbers," rather than actual amounts, can raise suspicions and increase the chances of an audit. High net worth: If the business owner has a high net worth, this can increase the chances of an audit, as the IRS may view them as a higher risk for tax evasion. By being mindful of these potential red flags, a small business can reduce its risk of an IRS audit and be better prepared in the event that one does occur.

If a small business disagrees with a final determination made by the IRS after an appeal and wants to take further legal action, it can file a petition with the U.S. Tax Court. The steps of a petition with the U.S. Tax Court are as follows:

File a protest: The first step in a tax appeal is to file a protest with the IRS Office of Appeals. This protest must be filed within 30 days of the date of the final determination. Gather additional evidence : The business should gather additional evidence to support its position and address any issues raised by the auditor. This may include financial records, receipts, invoices, and other supporting materials. Meet with an Appeals Officer: The business will have an opportunity to meet with an Appeals Officer to discuss the dispute and present its evidence. This is a good opportunity for the business to negotiate a resolution with the IRS. Receive a decision: After the meeting, the Appeals Officer will issue a decision in writing. If the business is still dissatisfied with the decision, it may take further legal action. Consider other options: If the Appeals Officer's decision is not favorable, the business may consider filing a petition with the U.S. Tax Court or seeking relief in a U.S. District Court. It is important to note that the appeals process can be complex and time-consuming, and having an attorney to guide the business through the process can be invaluable. An attorney can help ensure that the business's rights are protected, that all deadlines are met, and that the best outcome is achieved.

State and Federal Tax Audits for Small to Medium Sized Businesses

Atom Law Group provides legal representation for businesses facing tax audits. Our experienced attorneys provide legal representation for IRS audits, state tax, and federal audits. We understand that tax audits can be a daunting and stressful experience for businesses, and we strive to provide our clients with the guidance and support they need to navigate the audit process successfully. With our in-depth knowledge of tax laws and regulations, we help our clients develop effective strategies to minimize their tax liabilities and resolve any disputes that arise during the audit process. Contact us today for a consultation to learn how we can assist your business with tax audit legal representation.

State Tax Audits

Atom Law Group provides expert legal representation for small to medium-sized businesses in every state throughout the United States facing state tax audits. Our experienced attorneys have a deep understanding of the complex state tax laws and will work tirelessly to protect your business's financial interests. We know that the audit process can be stressful and time-consuming, which is why we strive to make the process as smooth and efficient as possible for our clients. Our attorneys will work closely with you to develop a strategic plan to address the audit and minimize any potential penalties or liabilities. We will also ensure that your business is in compliance with all state tax laws moving forward to avoid future issues.

Protect Your Business from IRS Audits

Let Our Experienced Attorneys Help You Navigate the Audit Process

As a small business owner, you have enough to worry about without having to deal with an IRS income audit. Unfortunately, these audits are becoming more and more common, and they can be both time-consuming and stressful. That's why we're here to help.

Our law firm is dedicated to assisting small businesses like yours in navigating the IRS audit process. We understand the unique challenges that come with running a small business, and we're here to help you protect your assets and your livelihood. Our attorneys have years of experience working with the IRS, and we know how to represent your interests effectively.

Don't face an IRS income audit alone. Let our team of experts help you every step of the way. We'll work tirelessly to ensure that your audit is resolved as quickly and fairly as possible so you can get back to doing what you do best – running your business.

While an accountant can be a valuable resource for a small business, there are several potential problems with relying solely on an accountant to deal with an IRS tax audit, including the following:

No legal privilege: Communications between a business and its accountant are not protected by the attorney-client privilege, which means that the IRS may be able to access these communications during the audit.

Lack of negotiating skills: An accountant may not have the negotiating skills to effectively represent the business during an audit and resolve any discrepancies or disagreements with the IRS auditor.

Limited scope of services: An accountant may not be equipped to handle more complex legal issues that may arise during an audit, such as criminal tax matters or tax disputes.

By retaining an attorney in addition to an accountant, a small business can have the best of both worlds: the accountant's expertise in tax and financial matters combined with the attorney's legal expertise and ability to represent the business during an audit. An attorney can help ensure that the business's rights are protected, that any legal issues are properly addressed, and that the audit is resolved in the most favorable way possible.

An attorney can help a small business defend an IRS audit in several ways, including:

Preparation: The attorney will review the business's records, including financial statements, tax returns, and other documentation, to ensure that everything is in order and to identify any potential weaknesses or red flags that may prompt an audit.

Representation: The attorney will represent the business during the audit, communicating with the IRS auditor and negotiating on behalf of the business. The attorney will also ensure that the business's rights are protected throughout the audit process.

Documentation: The attorney will provide the IRS auditor with any necessary documentation, including receipts, invoices, and other supporting materials to prove the legitimacy of the business's deductions and income.

Negotiation: If there are any discrepancies or disagreements during the audit, the attorney will negotiate with the IRS auditor to resolve the issue and reach a fair resolution.
Appeal: If the business disagrees with the outcome of the audit, the attorney can assist with filing an appeal and representing the business during the appeals process.
By working with an experienced attorney, a small business can have peace of mind knowing that its interests are being protected and that it has a strong advocate on its side during the IRS audit process.

There are several potential weaknesses or red flags that may prompt an IRS audit for a small business, including:

Inconsistent reporting: If the business's tax returns, financial statements, and other reporting are inconsistent or contain errors, this may prompt an audit.

Large deductions: If the business claims large deductions, especially those that are significantly higher than those claimed by other businesses in the same industry, this may raise a red flag and prompt an audit.

Home office deduction: The home office deduction can be particularly scrutinized, so it is important to ensure that the business is properly claiming this deduction and that all requirements are met.

Cash transactions: A high volume of cash transactions may raise a red flag, as it can be difficult to properly track and report cash income.

Unreported income: If the business fails to report all of its income, this can raise a red flag and prompt an audit.

Round numbers: Reporting income and expenses in even dollar amounts, or "round numbers," rather than actual amounts, can raise suspicions and increase the chances of an audit.

High net worth: If the business owner has a high net worth, this can increase the chances of an audit, as the IRS may view them as a higher risk for tax evasion.

By being mindful of these potential red flags, a small business can reduce its risk of an IRS audit and be better prepared in the event that one does occur.

If a small business disagrees with a final determination made by the IRS after an appeal and wants to take further legal action, it can file a petition with the U.S. Tax Court. The steps of a petition with the U.S. Tax Court are as follows:

File a protest: The first step in a tax appeal is to file a protest with the IRS Office of Appeals. This protest must be filed within 30 days of the date of the final determination.

Gather additional evidence: The business should gather additional evidence to support its position and address any issues raised by the auditor. This may include financial records, receipts, invoices, and other supporting materials.

Meet with an Appeals Officer: The business will have an opportunity to meet with an Appeals Officer to discuss the dispute and present its evidence. This is a good opportunity for the business to negotiate a resolution with the IRS.

Receive a decision: After the meeting, the Appeals Officer will issue a decision in writing. If the business is still dissatisfied with the decision, it may take further legal action.

Consider other options: If the Appeals Officer's decision is not favorable, the business may consider filing a petition with the U.S. Tax Court or seeking relief in a U.S. District Court.

It is important to note that the appeals process can be complex and time-consuming, and having an attorney to guide the business through the process can be invaluable. An attorney can help ensure that the business's rights are protected, that all deadlines are met, and that the best outcome is achieved.