IRS disputes can be intimidating and overwhelming, and building the best case to support your position can be a complex process. An experienced specialist can guide you through the examination and appeals process and help you determine an effective resolution for the case.
What are potential IRS audit risk areas?
Without proper due diligence, business owners can find themselves in sticky situations. Compliance is important in every aspect of business, but it’s especially important to pay attention to the current issues that the IRS has in focus.
The items below provide a checklist to help identify whether you or your business might be at risk for one—or more—of the IRS high probability audit situations for this year.
- Do you make charitable gifts through a donor advised fund or conservation easement?
IP monetization/royalty transactions, easements and donor advised fund transactions are under high IRS scrutiny.
- Are you planning to change your compensation structure in light of tax reform law changes?
The IRS position for reasonable compensation is reasonable replacement, which can complicate changes to wages, guaranteed partner payments or compensation from S corporations.
- Do you have a transfer pricing policy in place, foreign assets or operations?
International transactions are of special interest to the IRS. Returns not filed properly are subject to significant penalties, but requesting penalty relief and filing unfiled returns can alleviate potential penalties.
- Do you have a captive insurance company?
Recent U.S. Tax Court cases have emboldened IRS auditors to treat all 831(b) captives as shams.
- Do you have more than $10 million in assets?
High net worth individuals are easy targets for an IRS audit and probably will be audited.
- Do you have a self-directed IRA?
The IRS is examining SDIRAs to determine if they have violated the unrelated business income tax rules.
- Have you recently completed a business or asset valuation or a study?
The IRS will scrutinize the values determined in transactions or require a contemporaneous study.
How can I get help with my tax debt?
Many people end up turning to the one person they trust regarding taxes: their accountant. This is especially true if a long-standing and close relationship with their CPA has already been established.
Your CPA, paired with an IRS Dispute Resolution and Collections team, can be a powerful combination when you are dealing with a delinquent tax problem.
Pairing your CPA with a team of professionals that specialize in IRS Dispute Resolution and Collections work will help:
- Ensure optimal results. An experienced team can get the right payment plan established. A good team can also mean the difference between an accepted settlement agreement or one that is rejected.
- Meet collections deadlines. There is limited time provided by the IRS in collections due process matters. When those deadlines are disregarded, the IRS moves forward with their collections process, resulting in levies and other collections measures. An experienced team knows how to manage the collection deadlines.
- Negotiate your case. An IRS collections agent’s job is to collect money as quickly and efficiently as possible. Therefore, they appreciate (and you benefit from) working with an experienced team who knows IRS rules and can negotiate them on your behalf.
- Reduce the cost. Working with an experienced team helps to provide a more timely resolution. The sooner a case gets resolved, the less it will cost you.