In January of this year, the IRS reported conducting over 150,000 completed audits. Seventy five percent of these audits where conducted by phone or mail. Neither tax payer nor the professional representing the individual ever had the IRS physically enter their home or place of business.
IRS Audit - By phone or mail
These types of audits use batch-processing, this means the audit uses fully automated initiation, processing, and closing tactics. Referred to as the Automated Correspondence Exam system, or ACE, the audit is conducted with little or no involvement of a physical Tax Examiner. All corr exam (correspondence-based exam) cases, also referred to as correspondence exams, are in fact conducted virtually.
This may seem less threatening to the tax payer once notice of an ACE examination is received, but do not be fooled by the lack of human presence during these types of audits. These audits omit the face-to-face contact sometimes needed to turn the tables on your tax difficulties. Moreover, because your individual case may be selected to participate in an ACE type of audit, no tax representative from the IRS is assigned to your case. This means when correspondence is needed, or you simply have a question about your audit, you have no point of contact at all with a Tax Examiner. This inevitably leads to your concerns being shuffled around the IRS office from one rep to another.
Because there is no tax representative assigned to your case, corr exam are selected automatically, the audit notice is mailed automatically, the response time frames are tracked automatically, and Notice of Deficiency is mailed automatically; you hardly have a decent chance of getting audited fairly and without penalty from the IRS. You the tax payer is unable to insert themselves properly and exactly into the ACE audit process, there is no doubt the audit will eventually end in the IRS's favor.
The IRS Restructuring and Reform Act signed into law in 1998 states the IRS is to include in all manually -generated correspondence the name, telephone number, and a unique identification number of the IRS employee who is assigned to your individual case. The ACE system in essence violates the Restructuring Act since during this type of audit you are never assigned a tax rep or Tax Examiner.
When dealing with the IRS Problems, you need all the information available to you. It is important to understand your rights and contact a tax professional as soon as trouble arrives. Optima Tax Relief can help you understand some of the things you may face during your audit as well as help you find the best tax attorney for your individual case.