IRS Audit

For many people, receiving a notice of audit from IRS of their personal or business tax returns can be quite unsettling and stressful. After receiving a notice of audit, many taxpayers contact the accountant who prepared the tax return. However, a qualified tax attorney may be able to provide more comprehensive representation, especially since there is no attorney-client privilege with the accountant. In many cases, we handle the audit directly with IRS (even if an accountant prepared the tax return), and in other cases we work with the accountant, either directly with IRS or behind the scenes.

An IRS audit can arise in number of ways. The vast majority of audits simply result from an automated selection process based a comparison of a tax return to statistical data relating to similar tax returns. In other cases, the tax return may be selected on the basis of special programs or projects conducted by IRS regarding specific industries (such as construction companies, doctors or restaurants) or types of income (such as offshore income, tip income or partnership income) Of course, some audits arise from information provided to IRS by other government agencies, informants and others. In any case, an IRS audit usually starts with a letter from IRS notifying the taxpayer that the tax return has been selected for audit, proposing an audit date and providing a list of information and documents to be available at the beginning of the audit.

When we are hired prior to the audit, we typically meet with our client and review the tax return in an attempt to determine whether there are any circumstances which could cause concern; this meeting would be protected by the attorney-client privilege. Subsequently, we typically meet or speak with our client’s accountant and determine the status and sufficiency of the books, records and supporting documentation on which the tax return was based. Depending upon the results of our review and discussions, we may simply remain in the background, with the accountant dealing directly with IRS, or we may work directly with IRS. Generally, our approach is to defer to the accountant with regard to computational matters, while we focus on audit strategy, the evidence available to support our client's tax positions, penalty exposure, criminal exposure, burdens of proof, statutory interpretation and related legal matters.

In the vast majority of cases, we are able to resolve an audit at the auditor's level. The taxpayer may fully agree with the audit results, or there may be an agreement with some issues and disagreement with others. In a minority of cases, the audit may be entirely unagreed, meaning no agreement is reached with IRS. If the case is entirely agreed, our client simply signs the agreement form, and subsequently pays the tax, interest and penalties that may be due. If any material portion of the audit results is unagreed, we typically represent our client by filing an appeal of the audit results with the IRS Appeals Office.
 

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Who we are
Robert R. HendryRobert R. Hendry received both a Bachelor of Arts degree and a Juris Doctor degree from the University of Florida. Although he began his career in Pensacola, Florida, Mr. Hendry has practiced law in Orlando for more than thirty years.
Richard D. StonerRichard D. Stoner received a Bachelor of Arts degree from New York University and a Juris Doctor degree from Stetson University College of Law. He has practiced law in Orlando, Florida for more than twenty-five years.
G. Steven BrownG. Steven Brown is a 1975 graduate of the University of Central Florida, where he received a Bachelor of Science in Business Administration degree with a major in Accountancy.
Law for FloridaHendry, Stoner & Brown, P.A. traces its roots back to 1970, when Robert Hendry and Richard Stoner were principals together in a predecessor law firm. Our attorneys are committed to giving clients the legal edge they need to succeed and prosper.