During and after the audit

The day has arrived. You’ve got your client’s documents and your coffee. Here’s how to navigate the actual audit and what happens next. Field audits are often the most time-intensive and detailed type of IRS examination. However, with a plan in place, you can guide your client through the process with confidence and minimize stress.

During the audit

Once the audit begins, the IRS revenue agent will work methodically through the issues outlined in the audit notice, and potentially others that arise during the review.

Expect the revenue agent to:

1. Review your records in detail.
2. Ask clarifying questions.
3. Compare your documentation to the return.

Field audits can last hours or days, depending on the case, so be aware.

After the audit

When the field audit wraps up, the IRS will issue preliminary findings, and there are possible outcomes. 

Three possible outcomes:

1. No change: Return stands as filed.
2. Agreed change: Adjustments made, you agree
3. Unagreed change: You disagree, leading to appeals.

Your client’s rights

Under the Taxpayer Bill of Rights, with your help, your client can challenge IRS findings, appeal decisions, and retain representation throughout the process.

• The right to representation: Your client can have an enrolled agent, certified public accountant (CPA), or tax attorney present for all interactions.
• The right to challenge the IRS’s position and be heard: You can present additional records or explanations if you believe the IRS’s findings are incorrect.
• The right to appeal: Disputed audit results can be appealed within the IRS and, if necessary, taken to court.

Pro tip: Keep every piece of audit correspondence, and let your client know to forward any notices they receive. These records can protect you and your client in the future, especially if the same issue comes up again.

The Takeaway

Field audits are the most in-depth IRS reviews, but preparation, professionalism, and representation can make all the difference. The right approach can mean the difference between a no-change letter and a costly tax bill.

By managing the flow of information, staying professional throughout the process, and knowing your client’s rights, you can navigate the audit with confidence and position your client for the best possible result.