How does audit defense work?

June 29, 2020 by Robin Scott-Hutchens, EA
Audit Defense Tax Professional

Have you ever purchased audit defense through TurboTax as you wrapped up your tax return? Or maybe you visited www.taxaudit.com to purchase audit defense directly. Perhaps you’ve wondered what audit defense actually entails. Let’s take a look.

First – congratulations! You have taken the first step toward lowering your stress level should you ever receive an audit letter from the IRS or a state tax agency for a return you have filed. Audit defense gets you access to a dedicated tax professional (tax pro) who will work with you to help you understand the letter you received. They will also develop a strategy and handle all communications with the agency or examiner. There is no need for you to worry about the stress of answering an auditor’s questions.

Let’s break down how you, too, can work with your very own tax professional. The first step will be to report the tax letter as soon as possible. We all know how tax agencies love their deadlines, and it is likely your letter has one on it. So, it is essential to report your letter promptly. If you have audit defense from TaxAudit, there is a dedicated phone number and link on the TaxAudit website to do just that. From there, you’ll receive guidance on how to access a secured portal to share information and documentation with your tax pro. Your case will be assigned to a tax pro, and the communication and planning can begin.

As noted previously, your tax pro will reach out to you to get a better understanding of your tax situation for the tax year(s) under exam. You may be asked to provide some supporting documentation for review and possible submission. The tax pro will keep you updated on their analysis and be available to answer your audit-related questions. They will communicate with the tax agency on your behalf and create a response to the tax letter to clarify or support the items being reviewed on your tax return. The goal will be to make sure you pay no more tax than you rightfully owe, and help you understand why you may have additional taxes owed if that is the outcome. The tax pro will be your guide and representative throughout the entire process. In some cases, if needed, they will even prepare a U.S. Tax Court Petition.

 

Step 1 LetterStep 1: Promptly report your tax letter.



Step 2 Thumbs UpStep 2: Breathe; you’ve got this!



Step 3 CommunicationStep 3: Communicate and stay updated with your tax professional.



Step 4 Understand OutcomeStep 4: Understand the outcome and what to do next.



Step 5 clapping handsStep 5: Give yourself a hand because you made the wise decision to purchase audit defense in the first place.



The whole idea is to help educate you and get you through this ordeal with the lowest stress level possible. That requires a bit of participation on your part, but your representative will do all the heavy lifting when it comes to working directly with the tax agency.

While knowing you have audit defense may not have you secretly wishing for an audit, it hopefully eases your mind knowing what to expect. That puts you leaps and bounds ahead of someone who tries to handle an audit on their own.

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Karen Reed, EA

 

During her years as an audit representative for TaxAudit, Karen successfully defended the company’s members throughout the entire federal and state audit processes, handled cases assigned to US Tax Court, and developed procedures to make the audit process easier for taxpayers. Karen attributes a great deal of her tax acumen to the six tax seasons she spent as a return reviewer, analyzing thousands of returns. Responding in writing to questions from taxpayers, she became familiar with the common mistakes self-preparers make. Karen was previously the manager of the Tax Education and Research Department and the Director of Communications at TaxAudit. Her tax advice has been featured in U.S. News and World Report, the Los Angeles Times, the Chicago Tribune, and other publications.


 

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