What I’m doing
This year, I’m offering my clients the opportunity to purchase what I call IRS audit representation assurance. For an extra fee, paid at the time I deliver your tax return, I will agree to represent you in an IRS examination if the return is audited. For example, if you opt for this coverage on your 2012 income tax return, I will not charge you for representation before the IRS if the 2012 income tax return gets audited down the road. It’s an idea, taken from the large/chain tax preparation firms, to try and be proactive and hopefully make the best of a lousy situation that could happen to any of us. All professional fees are included for representation before the IRS, up to, but not including an appeal. My only requirement is you must contact me immediately (within a week) upon your receiving notification that you are being audited for the year in question, and that you do not contact the IRS directly. Instead, let me make the first contact.
Why I’m doing It:
Last year, a client of mine received a letter none of us enjoy finding in the mailbox. You guessed it. Her tax return for 2010 was going to be audited by the IRS. They presented it as a “National Research Project” being performed on a random basis to verify compliance with the tax laws. They can call it whatever they want. The reality is the tax return was examined line by line for all supporting documentation. Now, even though I’ve substantially discounted my fee (mainly because of our long standing relationship) this has been an expensive venture for my client, who has had to pay me for the countless hours organizing data and disseminating information to the revenue agent. The cost of representation before the IRS is significantly more than what it costs to have your tax return prepared. The reason is obvious. To prepare your tax return, we don’t need to see every receipt and document to support a deduction or income item. It takes a lot of time to organize the material to be presented in a manner that will, hopefully, result in a positive outcome.
Although the wealthiest Americans face the greatest risk for an income tax audit, the risks have been increasing steadily across all income levels. We’ve heard it in the news. And we know what’s going on in our economy. I’m not going to bore you with a bunch of statistics. Tax audits can tap into a whole lot of money that the IRS feels they are currently missing out on.
What you should do:
The offer is completely optional. It is not a part of my tax preparation fee. Nor is it required in order for me to prepare your tax return. It is a year by year choice that you have, being offered simply, for the reasons stated above: income tax audits are on the rise and I am trying to find a way to provide some semblance of peace of mind in the case of this unfortunate occurrence. If you would like to enroll in this service, simply indicate so on the space provided in our engagement letter. I will be happy to discuss this with you further, just give me a call.