Audit Alert! How to Pick the Right Los Angeles IRS Audit Attorney

Facing An IRS Audit In Los Angeles?

If you receive an IRS audit notice in Los Angeles, read it promptly and identify the response deadline. An IRS audit attorney in LA can help with legal issues; taxpayers may also represent themselves or use an authorized CPA or enrolled agent, depending on their needs.

Consider hiring an attorney if:

You received an audit notice and want help understanding the issues and arranging authorized IRS communications.
Your audit involves complex issues like business deductions or foreign accounts.
The potential tax assessment is significant.
You suspect the audit could become a criminal investigation.
You disagree with the auditor’s findings or believe they are incorrect.

An IRS audit notice can be stressful. Selection alone does not establish an error or dishonesty. This guide explains the examination process and how to choose appropriate professional support; it does not predict a Los Angeles taxpayer’s audit risk.

Check the representative’s active professional license, relevant audit experience, fee terms and proposed scope of work before engaging them. Ask who will handle your matter and whether any court work requires a separate engagement.

Key Steps in an IRS Audit

Receive the notice: The IRS starts an audit by mail. Identify the tax years, issues and response date.
Choose appropriate help: Consider an authorized representative and agree on communications and the scope of the response.
Gather information: Organize requested supporting records and respond truthfully during the examination.
Evaluate the result: Review a no-change conclusion or proposed adjustments, and protect any administrative appeal and court deadlines.

Understanding The IRS Audit: What LA Taxpayers Need To Know

The IRS examines returns to check reported income, deductions, credits and tax. Reviews may arise from computer screening, random selection or related examinations; the notice identifies the years and issues to address.

Information mismatches, such as income reported on Forms W-2 or 1099 but omitted from a return, may prompt IRS questions. Legitimate deductions are not improper merely because they are large. Enforcement priorities and funding do not establish an individual taxpayer’s current audit probability.

Want to know more about your specific risk factors? Check out our guide: Are You at Risk of an IRS Audit and How Far Back Can the IRS Go?

The Different Types of IRS Audits

Not all audits are the same. Understanding the type you’re facing is key to preparing correctly.

Correspondence audits request information by mail about identified return items. Match each requested item to supporting records and respond by the notice deadline. Professional assistance may help when the issue or evidence is difficult.
Office audits require you to meet an agent at an IRS office to discuss specific items on your return, such as business expenses or deductions.
Field audits involve an interview at a home, business or representative’s office and may cover complex records. Scope and duration depend on the issues; this format does not by itself mean fraud or require hiring an attorney.

Potential Consequences and How to Prepare

An audit may result in additional tax and applicable penalties. A common accuracy-related penalty is 20% of the affected underpayment; the civil fraud penalty is 75% of the portion attributable to fraud. Neither applies automatically to every adjustment. Interest on unpaid tax generally runs from the payment due date; penalty-interest rules vary.

Examine the factual and legal basis for each proposed adjustment and penalty. An audit can also end with no change or a refund; no representative can promise a particular outcome.

Gather records that substantiate the items the IRS actually questions. Keep originals and provide copies as directed. Missing documents should be discussed honestly; do not invent records. Depending on the issues, useful records include:

Receipts for all claimed expenses
Bank statements
Loan agreements
Canceled checks
Legal papers (divorce decrees, trust documents)
Mileage or home office logs
W-2s and 1099s
Prior tax returns

For more detailed guidance, see our article: Navigating IRS Audits: Tips, Remedies, and the Importance of Tax Attorneys

The Critical Role of the Statute of Limitations (ASED)

Assessment periods are not calendar-year pictures: Calculate the actual filing and due dates, applicable statutory exceptions and any valid extension. A generic three-year or six-year illustration cannot determine your deadline.

The Assessment Statute Expiration Date (ASED) is the IRS’s deadline for assessing more tax.

The Assessment Statute Expiration Date concerns the deadline to assess additional tax. The general federal assessment period is three years after filing, with an early-filed return generally treated as filed on its due date. This limits assessment, rather than merely starting an audit; statutory exceptions and agreed extensions may apply. A six-year period can apply to omitted gross income exceeding 25% of the gross income stated in the return.
A six-year assessment period can apply when omitted gross income exceeds 25% of the gross income shown on the return. Other special six-year rules and statutory exceptions may also apply.
Assessment may remain open without the ordinary time limit for a fraudulent return filed with intent to evade tax or when no return is filed. Other statutory exceptions require separate analysis.

The IRS may ask for written consent to extend the assessment period. You may decline or discuss limits, but declining may lead the examiner to act on the available record. An extension can also allow time to provide evidence or seek administrative review. Consider the terms and consequences with a qualified adviser before signing.

The Critical Role Of A Tax Attorney In An IRS Audit

A tax attorney can explain legal issues, organize a response and advocate for your rights during an audit. The appropriate level of assistance depends on complexity, potential exposure and your ability to respond.

A representative can review the audit notice and supporting records, identify disputed legal issues and help prepare a documented response. Keep copies of submissions and track outstanding requests.

Agree on which tax years and matters the representative will handle. Form 2848 may authorize eligible individuals to act before the IRS within its stated scope. Related resource: IRS Audit Representation.

When to Hire an IRS Audit Attorney LA

Consider counsel early when legal complexity, substantial disputed amounts or possible criminal exposure make self-representation difficult. Hiring an attorney is a choice, not a universal prerequisite to answering an audit notice.

Receipt of an audit notice: An attorney’s review from the start can prevent small issues from escalating.
Complex financial situations: Business transactions, foreign accounts or substantial investments may call for a professional with relevant tax-law experience.
Large amounts at stake: Compare the proposed fees and work with the disputed issues and amount at risk; savings are not guaranteed.
Possible criminal exposure: Seek a tax attorney’s advice before making statements when intentional wrongdoing may be alleged. Fifth Amendment rights belong to the taxpayer; an attorney can advise on their proper, fact-specific use.
Disagreement with the auditor: An attorney can negotiate, present legal arguments, and escalate your case to appeals if necessary.

For advice on finding the right professional, check out: How to Find Tax Attorney Los Angeles.

Tax Attorney vs. CPA for Audit Defense

While both are skilled professionals, tax attorneys and CPAs offer different protections during an audit, especially in serious cases.

Feature	Tax Attorney	CPA (Certified Public Accountant)
Primary Role	Legal counsel, litigation, tax controversy	Accounting, tax preparation, financial reporting
Attorney-Client Privilege	May protect qualifying confidential communications for legal advice; exceptions and waiver apply. Existing records and underlying facts are not automatically protected.	Section 7525 provides limited protection for qualifying tax advice in noncriminal federal tax matters. It does not provide a general criminal or state-law privilege.
Scope of Practice	May represent clients before the IRS when eligible; Tax Court and other court appearances require the relevant admission. Criminal defense requires appropriate licensure and competence.	A duly qualified CPA not suspended or disbarred from IRS practice may represent clients in IRS audits and appeals without separate enrolled-agent status. Tax Court practice requires separate admission; CPA status alone does not authorize criminal defense.
Legal Strategy	Expertise in legal interpretation, case law, and procedural rules.	Expertise in accounting principles and tax code application.
Criminal Defense	May defend criminal tax charges if appropriately licensed and admitted to the court.	CPA status alone does not authorize criminal defense in court.

Attorney-client privilege may protect confidential communications made to obtain legal advice, subject to exceptions and waiver. It does not automatically protect pre-existing documents or facts. The limited federal tax-advice privilege under section 7525 does not apply in criminal tax matters.

The Benefits of Proactive Representation

Timely professional involvement can help organize records and avoid missed deadlines. Choose an IRS audit attorney in LA based on the actual issues and agreed services.

Prepare a chronology, copies of the notice and returns, and a list of disputed items for your consultation. Ask how communications, document requests and deadlines will be managed.

Contact Segal, Cohen & Landis (SCL) to discuss the tax matter, relevant notices and deadlines, and available response options. Confirm the qualifications of the proposed representative and the scope of the engagement. Related resources: Business Tax Attorneys in Los Angeles: Key Insights.

Preparing a Documented IRS Audit Response

A practical audit response starts with the notice and the evidence for each questioned item. Discuss with Segal, Cohen & Landis how an IRS audit attorney in LA would evaluate your case and what the engagement would cover.

Counsel can review requested information, identify relevant records and explain legal objections where appropriate. Respond truthfully and comply with lawful obligations; limiting a response to its proper scope does not permit concealment or misleading omissions.

Contact Segal, Cohen & Landis to discuss the tax matter, relevant notices and deadlines, and available response options. Confirm the qualifications of the proposed representative and the scope of the engagement.

For more on our defense tactics, read: IRS Audit Defense Strategies: Navigating the Audit Process with a Payroll Tax Attorney.

Advanced Defenses: Pleading the Fifth and Other Legal Privileges

The Fifth Amendment can protect against compelled self-incriminating testimony, but it is not a blanket exemption from filing returns or producing all records. Application to particular questions or documents is fact-specific. Seek legal advice if criminal exposure is possible.

Different protections cover different communications and documents. Discuss attorney-client privilege, any applicable tax-advice privilege and possible waiver before sharing sensitive material. Official guidance: IRS examination and confidentiality guidance.

Resolving the Audit: Offers in Compromise and Innocent Spouse Relief

After an assessment, distinguish a dispute about the amount legally owed from a request for help paying a valid debt. Different procedures and deadlines apply.

An Offer in Compromise may resolve a qualifying liability for less than the full amount. Financial eligibility depends on income, expenses, assets and collection potential; filing and payment compliance are required. Inability to pay alone does not guarantee acceptance.

Innocent Spouse Relief may relieve qualifying joint-return liability attributable to a spouse’s or former spouse’s erroneous items. Lack of knowledge is only one requirement under the traditional relief rules. Separation-of-liability and equitable relief have different conditions; consider the applicable deadline and facts before requesting relief.

Learn more about these options here: Essential Los Angeles Tax Relief Options for Economic Relief.

After The Audit: Navigating Appeals And Collections In LA

If you disagree with an audit adjustment, review administrative appeal rights and any court deadline immediately. Counsel can help evaluate the available procedures; representation alone does not suspend collection or extend a deadline.

Disagreeing with the IRS: The Appeals Process

Follow the instructions and response date in the examination report and any 30-day letter to request review by the IRS Independent Office of Appeals. State the disputed facts and legal grounds and provide supporting records. Do not confuse this administrative response with the separate Tax Court petition deadline.

For a statutory notice of deficiency, a Tax Court petition generally must be filed within 90 days after mailing, or 150 days if the notice is addressed to a person outside the United States, subject to applicable timing rules. IRS discussions do not extend this period. Check the notice and obtain advice promptly; court representation requires admission to that court.

Understanding your rights is key. Learn more here: Los Angeles Tax Laws: What You Need to Know About IRS Representation.

Handling IRS Collection Actions

Unpaid assessed debt can lead to a federal tax lien and, after applicable procedures, bank or wage levies. Certification of qualifying seriously delinquent tax debt can affect a passport through State Department action; statutory exclusions and exceptions apply.

An IRS audit attorney in LA can review collection notices, request available review or relief, and discuss an installment agreement. Relief depends on the applicable conditions; hiring counsel or requesting help does not automatically release a lien or levy.

Our comprehensive Tax Services include a robust defense against these aggressive collection tactics.

The Los Angeles Advantage: Local and State Tax Expertise

California tax examinations are separate from federal IRS audits. Confirm which agency sent the notice and whether the proposed representative handles that type of matter. Relevant agencies include:

The California Franchise Tax Board (FTB) for state income tax.
The Employment Development Department (EDD) for payroll tax audits.
The California Department of Tax and Fee Administration (CDTFA) for sales and use taxes.

Federal and California matters may involve related records but separate procedures and deadlines. Confirm the representative’s relevant experience and do not assume an IRS resolution also resolves a state assessment.

Frequently Asked Questions About Hiring An IRS Audit Attorney LA

Facing an IRS audit brings many questions. Here are clear, straightforward answers to some of the most common concerns.

How much does it cost to hire a tax attorney in Los Angeles?

Fees vary with the disputed issues, records, anticipated work and professional’s billing arrangements. Request a written explanation of hourly or fixed fees, retainers, expenses and whether appeals or litigation are included. This guide supplies no verified market-rate quote.

Weigh the cost against the complexity and amount at issue, including the value of procedural guidance. An attorney’s fee does not guarantee tax savings or a financial return.

For more on typical costs, explore our resources: An Overview of Fees for Los Angeles Tax Attorneys and Average Costs of Hiring a Tax Attorney in Los Angeles.

Can an attorney reduce the amount of tax I owe?

A representative may identify unsupported adjustments, present substantiation or request relief authorized by law. Correctly owed tax cannot simply be eliminated by hiring counsel. Possible approaches include:

Requesting penalty relief: Evaluate whether reasonable cause, an applicable administrative waiver or another legal basis supports removal of a particular penalty.
Exploring a settlement: Assess the factual and legal dispute or, for a qualifying collection matter, the available compromise rules. Acceptance is not assured.
Challenging incorrect assessments: We will vigorously challenge any errors the IRS has made with strong legal arguments.

Outcomes depend on evidence, law and individual circumstances. This guide does not claim a verified success rate or that representation necessarily produces a lower assessment.

What is the very first thing I should do after getting an IRS audit notice?

First, verify the notice and record the tax years, issues and response deadline. Do not ignore it.

Gather the return and relevant records. You may contact the IRS using verified notice information or consult an authorized professional. Obtain legal advice promptly if criminal exposure is possible, while protecting all response deadlines.

Key points to remember:

Do not ignore the notice. Without a timely response, the IRS may complete the examination using the available information and propose changes.
Respond accurately and on time. You may communicate yourself or through an authorized representative; a formal summons may still require your participation. Do not make false statements or conceal relevant records.

For a consultation, provide the notice, relevant returns and your deadlines, and confirm the proposed scope and fee terms. Related resource: Contact.

Conclusion: Secure Your Peace Of Mind With The Right LA Tax Attorney

An IRS audit deserves timely attention. Potential consequences depend on the facts and may include additional tax and penalties; suspected intentional violations require particular care. Choose assistance suited to your situation.

An IRS audit attorney in LA can provide legal advice and representation within an agreed engagement. Discuss your needs with Segal, Cohen & Landis and confirm the responsible professional’s qualifications.

Contact Segal, Cohen & Landis to discuss the matter. Verify the proposed representative’s qualifications, meeting arrangements and scope of engagement; do not assume a particular result or completion time.

Don’t let an IRS audit control your life. Take a proactive step to regain control and secure your peace of mind.

Get expert help from a Los Angeles Tax Attorney