Tax Audit Defense Services

Tuesday, December 2, 2014

We are almost always successful in handling tax audits. The reason is that the rules are typically unambiguous and the practical issue is twofold: 


(1)   Does the taxpayer’s position have merit?

(2)   If so, does the evidence exist to prove the taxpayer’s position?


Often, the facts change as the case unfolds. Our answers to the above questions also change. We continually reevaluate the taxpayer’s case. Once we believe that an investment of a dollar in fees will result in the abatement (or refund) of three dollars in tax, we seek settlement. Typically, the taxing authority will estimate the amount of our fees to try a case in court. They will usually offer to settle for our anticipated fee. Thus, most cases settle advantageously.


It is not unusual for the taxing authorities to begin the settlement negotiations by offering to reduce the proposed tax assessment by 20 cents on the dollar. By the end of the negotiations, they will accept a reduction in the tax assessment of between 50 and 80 percent. In some cases, they give the taxpayer a “no change” agreeing that the taxpayer did not owe the government anything.