Audit Representation
Audit Repesentation: Federal and State
We understand that one of the most dreaded letters you can receive is one beginning with the words "your tax return has been selected for audit."
It has been our experience that most tax returns selected for audit were chosen because items on the return were viewed as being “suspicious” by the Internal Revenue Service or a state-taxing agency. As a result, it may be very dangerous to attempt to represent yourself in an audit even if you do not believe that you did anything wrong.
Auditors are trained on how to interrogate taxpayers so that unreported income can be "discovered" and certain deductions can be disallowed. Taxpayers representing themselves without any knowledge about how the “system” works are at a major disadvantage. People representing themselves also run the risk of being criminally prosecuted for “making a false statement.”
The attorneys at the Law Offices of Stephen Moskowitz, LLP have a successful history of representing countless numbers of taxpayers through the audit process. Our attorneys assist our clients with developing strategies for audits and Internal Revenue Service Appeals with unparalleled success.
Our attorneys are skilled at framing appropriate responses and drafting protests to the Internal Revenue Service and state in the audit setting. When helpful to a client's case, our law firm represents our clients at every administrative and judicial level.
Our attorneys have handled matters involving complex offshore abusive tax haven activities, controversies arising out of the formation of closely held corporations, partnerships, and joint ventures.
Our attorneys have also represented clientele in a broad range of federal and state controversies involving the deductibility of ordinary business expenses, accusations of unreported income, imposition of civil fraud penalties, accuracy penalties, substantial understatement penalties, and negligence penalties.
As a general rule, we appear before the taxing authority on behalf of our client, and either at an audit or other hearing, to avoid the client being interrogated by the Internal Revenue Service or a state taxing agency. In most cases, the law allows our law firm to answer all of the questions presented by the government.
Often the Internal Revenue Service disallows taxpayers' business expenses and other similar deductions taken on their tax returns because they cannot provide specific documentation to substantiate claimed deductions. In many of these cases, we are able to assist our clients either reconstruct their recollection or use alternative methods to substantiate a deduction. Our attorneys are also experienced with defending accusations of unreported income and other accusations which could lead to an auditor's referral to the criminal investigation division.A few examples of audit representation the attorneys of the Law Offices of Stephen Moskowitz, LLP have handled are described below.
The Miscalculated Income
After receiving an audit notice, our clients in this case discovered that they inadvertently committed an error in calculating the income they received and therefore under-reported a hundred thousand dollars on the income tax return being audited. Given the amount of taxes involved, our clients were facing a serious risk of a criminal referral by the auditor or the imposition of substantial civil fraud penalties in addition to the tax liability and interest the clients knew they would owe.Our attorneys successfully assisted our clients in complying with the voluntary disclosure procedure to the Internal Revenue Service with regards to the error to minimize their criminal exposure after the audit had already been initiated.
The attorneys of the Law Offices of Stephen Moskowitz, LLP were then able to convince the auditor not to make a criminal referral or even assess civil fraud penalties. The attorneys of Law Offices of Stephen Moskowitz, LLP then worked out payment arrangements with the Internal Revenue Service so that our clients could pay back the additional tax liability within a reasonable time and without any enforced collection activity of any kind.
The Unwelcome Auditor
Our clients were facing an extremely aggressive Internal Revenue Service auditor who believed that income was not reported on the income tax return being audited. At one point, the auditor issued a series of summonses demanding that our clients allow him to personally interview them in their home. The auditor wanted to use these summonses not only to interview our clients, but also search their home.
The attorneys at Law Offices of Stephen Moskowitz, LLP were able to finally convince the Internal Revenue Service that it was illegal for them to try to search a home of a taxpayer in this manner. However, this was not an easy process. In the course of this dispute, the Internal Revenue Service issued summons after summons and even threatened to file an action in Federal District Court to allow them to enter the residence of our client.The Offshore Tax Shelter
Our firm has represented numerous clients who were accused of participating in prohibited offshore tax shelters. In most these cases, not only did the IRS propose to assess the client with a large tax liability, penalties, and interest, they also sought to charge the client with numerous currency offenses. Our attorneys achieved an extremely favorable settlement for our client and convinced the IRS not to assess any currency related penalties.
