Tax Audit Information

Boston area lawyer Theodore L. Craft is an expert in the proof elements, privileges and presumptions arising in the area of tax audits. His more than 40 years of knowledge in dealing with precisely this area of taxation lends credibility to your case while providing assurances you will receive competent representation.

In his more than four decades of experience, Massachusetts tax attorney Craft has represented everyone from small businessmen accused of fraudulent tax practices, to New York and NASDAQ Stock Exchange companies with millions of dollars on the line in industry-specific tax issues of major importance to the industry.

Tax Audits Initiated By The Internal Revenue Service's Examination Division

Tax returns are selected for examination for many different reasons. Once selected, a tax return is assigned to a revenue agent for the district in which the individual taxpayer or business taxpayer is located.

The revenue agent may send a notice to the taxpayer that a return is being examined and invite the taxpayer into his or her office for discussion of issues identified in the initial letter. An initial letter may also be more pervasive. It may request records of a scope that may appear overwhelming, possibly over a period of multiple years. Usually, the taxpayer is not given a lengthy period of time within which to respond.

Examination Of Records And Other Taxpayer Evidence By The IRS Examination Division

During the examination of records and other taxpayer evidence in support of claims made on an income tax return, questions arise from the records and the other evidence presented. These questions may appear invasive insofar as they delve into any and every aspect of a taxpayer's personal life and/or business.

It is often the case that the IRS has developed information from third parties in advance of a federal and state tax audit. In such cases, a client's testimony may be seen as contrary to information already in the IRS's possession. This will deepen inquiry by an examining agent. Attorney Craft will study the facts, evidence and potential issues in a case thoroughly with those he represents. He will anticipate any required defenses.

The Importance Of The IRS Tax Audit Report

At the end of an examination, the revenue agent will incorporate any income tax examination changes in a report. The evidence and testimony submitted during the tax audit are the basis for any examination conclusion.

Attorney Craft is knowledgeable in the areas of weight and sufficiency of evidence on any factual or legal tax issue raised on an audit. If an income tax examination change is adverse to a taxpayer, the taxpayer will have time within which to respond. Further evidence may be required.

The Process For Appealing Tax Audit Changes

Appeals from audit changes are taken to the appropriate regional office of the IRS by way of a document called a protest. The protest is a comprehensive document. The protest must contain factual representations regarding the evidence, namely, what it proves and why, based upon substantive and procedural notions of tax law. Moreover, it must say why the examining revenue agent's conclusions of fact upon the evidence, and his interpretations of tax law, were wrong.

Experience Trying Cases Before The IRS Appeals Division

A tax appeal may ultimately result in the taxpayer losing on arguments presented at a hearing on the protest before the IRS Appeals Division. In such a case, the taxpayer will be liable for payment of tax due in accordance with the final determination of the IRS Appeals Division. However, the taxpayer is entitled to defer the payment of the tax by filing a petition in the United States Tax Court for a re-determination of what is termed in tax law as a "deficiency in tax" or a tax deficiency. If the taxpayer wins the case in tax court there would be no right on the part of the IRS to collect the tax determined by the tax court unless it is established in a successful appeal by the IRS to a federal circuit court of appeals.

Attorney Craft has extensive experience filing cases in the United States Tax Court, where he strives to offer evidence, and to support his taxpayer's cause through legal advocacy. The mission in tax court is to prove that the IRS's determination, as set forth in its notice of deficiency, is erroneous. When a taxpayer introduces credible evidence relevant to support a tax return position or claim, the burden of proof with respect to factual issues may be shifted to IRS. The IRS attorney then bears the burden of proof. Whether a shift of the burden to IRS to go forward with its proof occurs depends upon whether substantiation and record-keeping requirements have been met by the taxpayer in the first instance. Procedural requirements imposed by IRS regulations relative to an audit or appeal must also have been met.

The Complexities That Follow A Criminal Tax Investigation

During a tax audit, the revenue agent may feel that there are indications of error on a return that are more egregious than mere negligence in representation or omission. Tax return claims may be seen to be unfounded or speculative, based on false evidence or fraudulent intent. If, during the course of a tax audit, the revenue agent believes that a tax return involves fraudulent intent, the agent may refer the case to the Criminal Investigation Division of the Internal Revenue Service. That division will provide a review of the referral and render an opinion on whether the audit should be suspended and a criminal tax investigation initiated.

Such audits have been coined in phrase as "eggshell" audits. Representation by a competent tax attorney with expertise in all administrative and judicial aspects of criminal tax law is critical to avoid deeper difficulty that might otherwise be involved without representation during an "eggshell" audit.

Contact A Lawyer For Help With The Internal Revenue Service's Examination Division

If you have had a run-in with the IRS Examination Division, you should seek experienced legal advice. Contact our skilled tax attorney online or call 888-TAX-RISK to schedule an initial consultation to discuss your situation.