Audit Representation

What Is An IRS Audit?

An IRS audit is a formal review of your financial information to verify that taxes were reported accurately and in accordance with the law. Selection for audit does not always mean that there is a problem – millions are audited every year at random.

In many cases, merely sending in the requested paperwork is sufficient. However, if you cannot produce the requested information, or if your audit is related to a known issue, you should seriously consider representation.

What Our IRS Audit Representation Can Do For You

When you are being audited, experience counts and we have the experience people count on. Even when you believe you have made no mistakes in your tax returns, the threat of an audit is stressful, and one misstep can complicate your problems. Complete a Power of Attorney giving us authority to work with the IRS and let an experienced attorney speak to the IRS on your behalf.

We have a team of tax professionals, including tax attorneys skilled in audit methods who can attend the audit on your behalf, and reconstructive accountants who, if necessary, reconstruct books and records. We will fiercely protect your rights.

Parallel audits: When our client faces an IRS audit, we do a parallel audit using IRS procedures to determine what is raising concerns so we can document the deduction or income. We compare our audit with the IRS audit to find the misperceptions and mistakes in the tax return.

IRS investigation: Internal Revenue Service auditors are trained to ask questions that will elicit information about deductions and unreported income. Even a slight misstatement on your part can mean additional difficulties. That is why our firm recommends that you have experienced legal representation at all times during the audit process.

Effective legal representation: Because you have a right to legal representation during the audit process, we do not require clients to actively participate. An IRS audit is civil in nature, but if fraud or false reporting of information is suspected, it can become a criminal investigation. Therefore, anything you say can be used against you. It is imperative to have an experienced and effective tax attorney represent you. Your Pennsylvania tax audit attorney can appear in your place and answer all questions.

Disclosure of income: If your bank deposits exceed your reported income, the IRS may question this discrepancy. They will assume all deposits were taxable income and then assess you additional taxes. Our firm will identify potential reasons for these discrepancies, i.e., loans, gifts, re-deposits of cash, etc., and explain to the IRS why these differences exist. Moreover, we will advise you how to get the evidence to prove the deduction.

Documentation of deductions: The IRS wants documentation-receipts, canceled checks, bank statements-to support your deductions. If this documentation is no longer available we can help you reconstruct your records or use other indirect methods to prove that your deductions are legitimate. A disallowed deduction can result in additional taxes plus penalties and interest.
Should you ignore an audit reconsideration?

Audit Reconsideration

If you do not respond to an audit notice, the IRS can make a summary assessment, which punishes you first by denying all of your business expenses, then assessing substantial taxes, penalties, and interest, followed by the seizure of income and assets including wages, bank accounts, automobiles, and real property.

In one case, a taxpayer missed the audit because his child died suddenly. The auditor was unaware of the reason and, outraged, denied all expenses and assessed huge penalties, to boot. We refiled the taxpayer’s tax return; the same auditor handled the case and allowed all of the taxpayers’ expenses. After suffering years of losing their tax refunds, the taxpayers were repaid by the IRS. Great case.

Audit reconsideration is a little known secret that can benefit taxpayers suffering from a bad audit. However, few representatives take advantage of it and even fewer taxpayers know it exists. We will attempt to reopen an old audit through audit reconsideration. We can also file original tax returns to bring you into voluntary tax compliance.

If you did not attend your audit and you have a large tax liability or the IRS has filed Substitutes for Returns in place of an original return you have not yet filed, call the attorneys at McCauley Law Offices for a confidential discussion of your options. Call 1-877-829-5267.

IRS “Red Flags”

If you have not been audited and want to keep it that way, be aware of the red flags the IRS looks for when reviewing your returns and know how to avoid them.

Math errors: If you prepare your own tax returns, double and triple check your numbers to make sure everything is accurate.
Round numbers: Accurate reporting rarely results in perfectly round numbers. Avoid estimating, and if you do limit your estimation to the nearest dollar.
Reporting too many losses: If you are self-employed resist the temptation to file personal expenses as business expenses. An overabundance of losses may make the IRS wonder how your business is surviving. Only deduct those expenses essential to your work duties.
Claiming too many charitable donations: Of course, donating to charity can make you eligible for legitimate deductions, but never report false donations. If you can’t back up the donation with documentation, don’t claim it.


Even compliant taxpayers do not want the IRS going through their financial information. For more detail, a comprehensive guide on how to avoid an IRS audit can be found on our blog: How to Avoid an IRS Audit.


Success Stories



Gambler Saves $60k in IRS Tax, Penalties & Interest