Do I Need a Tax Lawyer If I’m Being Audited?

Whether you should consult with a tax lawyer depends on the specific facts relating to your tax audit. However, there are some circumstances where it is vital that you retain the services of a tax lawyer to make strategic decisions and negotiate with the IRS or state tax authority.

Types of Tax Audits

There are many different types of tax audits. You may be facing any of the following types of tax audits:

an IRS income tax audit
an IRS payroll tax audit
A California payroll tax audit
A California sales tax audit
A California income tax audit

For certain types of tax audits, you should always consult with a tax lawyer. If the California State Board of Equalization is auditing your sales tax records, it could end up affecting your state income taxes and federal income taxes if a determination is made that you underreported Sales. Avoid this costly and time-consuming process by consulting with a tax attorney if your state sales tax records are being audited.

When to Retain a Tax Lawyer

There are several other situations where you should consult with a tax attorney, including:

Criminal tax charges – Contact a tax attorney immediately if you have been investigated for any criminal tax violations. Keep in mind that the IRS can use statements you make against you. A routine audit can turn into a criminal investigation if you lie to the IRS or otherwise try to cover up tax errors.
Large amounts of money are at stake – If your tax audit could potentially result in hundreds of thousands of dollars in back taxes, penalties, and interest, you should retain the services of a tax attorney. A tax lawyer may be able to negotiate what penalties you are charged or find other ways of reducing the amount you owe
You disagree with the position taken by the IRS or state tax authority – If you believe that the IRS or state tax authority is wrong, you may need a tax attorney to handle your appeal. You may appeal the case to the IRS, or take it to the United StatesTax Court.

What starts as a routine tax audit can end up becoming a serious investigation, sometimes involving criminal charges or heavy civil penalties. If you want to make sure your tax audit is handled properly, get help from an experienced tax lawyer.