Responding to an IRS or FTB Audit Request: Tips for San Franciscans

Filed in CPA Blog by on November 15, 2013
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IRS and FTB audit requests can be scary!  Getting a letter from either the IRS or the FTB of California (or both) is likely to make even a  totally honest San Francisco resident sweat, as getting audited means having your records subjected to IRS and FTB scrutiny. Most of the time there is little to fear, but just the process itself is nerve-wracking. We help our Bay Area clients defend against IRS and/or FTB audits and work with them every step of the way.

While we can’t promise results (each taxpayer situation is different), we can promise we will do our utmost to work as hard as possible to minimize your legal tax burden.  If you live in the San Francisco Bay Area, or anywhere in California, and have received an audit notice from either the IRS or FTB, please call us at 415-742-4249 or email us for a free phone coSan Francisco IRS Auditsnsultation.  We can establish what you need to do, and go from there.

Here are some tips on how to respond to an IRS and/or FTB Audit Request

  1. Educate yourself as to the ground rules among you, your CPA, and the IRS. Tax audits are complicated and the first step is to meet with your CPA or accounting firm and establish ground rules, especially concerning what records will be needed, any analysis to be done, and compliance requirements for IRS or FTB requests.
  2. Establish a Location for any IRS or FTB Meetings. Usually, for individuals the meetings take place at the IRS offices in San Francisco.  For Bay Area companies it may be at your place of business somewhere in the San Francisco Basy Area. We prefer to have the meetings at our own office in San Francisco.  You want a friendly, calm environment to reduce stress.
  3. Who Communicates What. The IRS and/or FTB may ask you questions. It’s better if your CPA responds, as he or she knows the tax situation. Taxes are complicated, and it pays to have an expert speak for you!
  4. Get Extensions, if Necessary. If you don’t have all the information needed, it may be possible to request an extension. But don’t delay finding a CPA or accountant if you get a notice from either the IRS or FTB (or both).  Time is important and extensions are not forever!
  5. Be Prepared to Go Up. Sometimes you get wonderful San Francisco-based IRS or FTB agents, and sometimes not so much. If you and/or your CPA are not in agreement with their judgement, you can be prepared to go higher.  That’s not always a good strategy; but we can help advise you on what is reasonable and when it’s worth the hassle of fighting.

Minimize Your Chances of an IRS and/or FTB Audit

The best way to minimize your chances of an audit are to have your taxes prepared by a professional, and do so in a timely, constructive manner. If you keep good records and follow the rules of the law, you are less likely to be audited. And if you are audited, those good records and organized procedures will help you deal with an audit. The more prepared you are, the less worried you need to be.

We work hard with our clients to minimize their taxes in every legal way, and we work hard so that tax records are kept in an organized fashion. So if we are subject to an audit, even the stressful event of an audit is a non-stressful as it might humanly be!

Useful links –

IRS Circular 230 Notice

The Internal Revenue Service requires Safe Harbor LLP to inform the reader that any tax advice contained in this correspondence cannot be used for the purpose of avoiding penalties under the Internal Revenue Code or for promoting, marketing or recommending to another party any transaction or matter addressed.

 

 

 

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