3 Ways a Legal Plan Can Help with Tax Audits

It’s not something any of us think will happen to us, but the dreaded tax audit does happen. If you were to be audited, would you know what to do?

Navigating through an IRS audit can be a stressful experience, and legal assistance is often needed. Paying for an attorney out of pocket could cost you upwards of $3,000 out of pocket if you don’t have access to legal help through a group legal plan.[1]  With a group legal plan, members are covered for many of the legal issues they face during a tax audit.

Here are ways that an attorney can help in the event of a tax audit:

Gathering Documentation
Although some audits occur because the IRS finds something on your return, a certain portion of audits are just done randomly. This is why it’s so important to reach out to an attorney if you are contacted by the IRS or a state/local tax authority regarding your return. An attorney can review your tax return, answer any questions you have and help you get the necessary documentation together. During the audit you will likely have to produce receipts for the things you took as deductions, such as charitable donations or self-employment expenses, for example. You can discuss with an attorney what documentation to gather based on your return.

Negotiating with the agency
If you are audited and have to pay back taxes because of a mistake or error, you can usually negotiate a payment plan with the IRS. The IRS provides you with several different options to pay it back, including an “Offer in Compromise,” that allows you to settle your tax debt for less than the full amount you owe.[2] Depending on how much money you owe and what your financial situation is, your attorney can help you decide which of the options available to you would work best.

Representation
Appearing before the IRS can be an intimidating experience. Group legal plan members have access to attorneys that can attend an IRS or a state or local taxing authority audit presenting receipts and/or other proof of claims made on your return.

Legal plan members have access to attorneys for assistance with these issues and more. If you are a legal plan member, you can find an attorney and see what your plan covers here:  members.legalplans.com.

 

[1] Cost based on the average amount of hours it would take, using the average hourly rate of $338.00/hour based on years of legal experience,

[2] IRS.gov https://www.irs.gov/payments/offer-in-compromise