Just because an individual gets selected for an audit doesn’t mean he has to roll over and accept whatever fate the IRS hands him, says Alex Zorab. A certified public accountant and partner at First American Tax Services in Chicago, Zorab has a long history of helping clients fight back in cases involving the IRS. Here is his advice on what to do if you disagree with the IRS’ assessment of your tax situation.
Of course, individuals who disagree with the Internal Revenue’s (IRS) assessment of what they owe can argue their case in court. The most important thing in trying to make this type of case, however, is making sure that the client has kept as much documentation as possible over the years.
As long as a person has kept everything that he needed to keep, he should be able to go right into the courtroom and prove why the IRS is wrong in its case. Before beginning a case like that, though, I would advise my client to go through his records and get his hands on every piece of documentation that he can find, because the more records and documentation a person has, the better his chances are of winning the case.
Many people think that it is impossible to fight the IRS and win. But the truth it, if you keep good records and you hold on to your financial documents, then you have a good chance of proving your case. If you think that the IRS really went too far with a situation or that the agency is wrong in its findings in some way, then you can definitely fight them in court and try to prove your side of the argument. But if you are going to go through with this, then you should be sure to have all of your documents in place.
One service we offer at First American Tax Services is to help prepare our clients to meet with the IRS in court. If a client we are working with does not have all of his important records on hand, then we will help him rebuild them. We have the resources to find older records and documents—including bank statements and copies of checks—that prove whether or not certain taxes were paid in the past.
For example, one thing that we can do is we will tell the client to give us his bank statements and copies of checks, and then we will put those documents together in a way that looks organized and makes sense when fighting a case with the IRS. We need the records and the backups for these records, though, in order to fight the IRS.
Individuals on their own, however, would never be able to fight the IRS simply because they would not know which documents to collect or how to prepare them in a way that makes sense in the case. It is impossible for an individual who is not a professional to try to represent himself against the IRS. Anyone going against the IRS needs to have some form of representation in court, whether that means hiring a CPA or a lawyer to have on your side.
The most common reason why individuals need to fight the IRS in the first place typically is the result of a lien or an audit that they do not feel was done correctly. Essentially, any time that the IRS assesses taxes and an individual knows that he has the documentation and records to prove them wrong, then that is grounds for a case in court.
Once again, though, it is important that people realize that they cannot just prove the IRS wrong without strong evidence on their side. And in the case of liens and audits, the best evidence is usually past bank statements, paid checks, and other financial records that prove without a doubt that the individual is correct and that the IRS is wrong in its assessment of the case.
Even if a client does not have the documents ready right away, as long as the documents that he needs can be worked on and rebuilt, then he has the right to argue his case with the IRS in a tax court. And as long as he works with a company like mine and brings in all the right records, he has a good chance of making his case.
