Is Audit Defense Tax Deductible?

October 28, 2021 by Charla Suaste
Tax Deductions

For those of you who have purchased audit defense – or are considering purchasing audit defense – you may have wondered whether or not you can deduct this purchase on your tax return. In short, the answer is: it depends!

Generally, for individual taxpayers who do not own a business, Audit Defense Membership fees can be claimed as an itemized deduction (subject to limitations). However, because of the Tax Cuts & Jobs Act of 2017, miscellaneous itemized deductions that are subject to limitations are not deductible for tax years 2018 through 2025. So technically, yes, this purchase is deductible – just not until the year 2026 or until the law changes, whichever comes first.

On the other hand, if a taxpayer has a sole proprietorship and reports their business income and expenses on Schedule C, they may claim a prorated amount of the Audit Defense Membership as a business expense.

Of course, the option to deduct audit defense on your tax return is just one of the many benefits of having a membership with us! Upon receiving a notice from the IRS or state taxing agency for the tax year you purchased audit defense, you can call us immediately and we will step in to help.

Your first step will be to contact our Customer Service team, who will verify your information and create a case file for you. You will then be assigned to your Case Coordinator. This person will be there to provide administrative and technical support throughout the duration of your case. They will start by helping you get set up in our secure message portal and request any necessary documentation. Once they receive any requested documents, they will assign your case to one of our world-class tax professionals. This individual will work closely with you to:
 

  • Review your documentation
  • Explain your options and develop a strategy
  • Present your documentation to the proper taxing authority
  • Make phone calls to the IRS and state taxing authority on your behalf, including scheduling and attending all phone and in-person appointments.
  • Prepare requests for appeals conferences, if necessary.
  • Prepare a U.S. Tax Court Petition, if necessary.
  • Ensure you pay no more taxes than what you rightfully owe

Lastly, while many tax firms charge hundreds to thousands of dollars to represent taxpayers to the IRS, TaxAudit only charges a flat, one-time fee to handle your case from beginning to end.

Purchasing TaxAudit’s audit defense is one of the best things you can do when filing your return. Are you filing late? No problem! Do you want memberships for previously filed tax returns? We’ve got you!

Our goal is to provide you with the peace of mind in knowing that the largest audit representation firm in the country is on your side and that you never have to face the IRS alone. Being able to deduct the cost of the purchase on your tax return is just a bonus.

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Charla Suaste
Communications Content Developer

 

Charla Suaste joined TaxAudit back in 2007 and, over the past 14 years, she has worked in a variety of different roles throughout the organization, including as a Customer Service Representative, Case Coordinator, and Administrative Services Assistant. She now serves as the Communications Content Developer and is passionate about writing, editing, and making even the most complex concepts easy to understand. Outside of work, Charla enjoys traveling, listening to podcasts, and spending time in her garden.


 

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