The Internal Revenue Service (IRS) is attempting to increase efficiency. It is using various types of software to help determine which tax filings warrant additional scrutiny and to help let the agency know when to conduct audits. Although this may sound like a great way for the agency to manage its workload, it has led to some serious headaches to taxpayers.

Unfortunately, these headaches may result in more than just a moment of frustration. A failure to fully prepare and advocate for one’s interests could result in allegations of criminal wrongdoing. A recent case provides an example.

A group of taxpayers’ advocates did a deep dive into the agency’s use of correspondence audits. The agency often sends these mailings after software flags an issue. During the group’s research, they found a questionable case that provided an example of what can go wrong with this system.

The software flagged the taxpayer due to low reported income. As a result, the IRS conducted an audit and accused the taxpayer of hiding income and making false claims for deductions. The taxpayer in question had no history of issues with the IRS. He responded to the agency’s notice, providing additional information to substantiate his deductions and business expenses. The case spanned years. The taxpayer, a college professor, attended multiple hearings to fight the IRS’ claim that he had filed false tax returns.

The case serves as an example for taxpayers. Even a mailed, or correspondence, audit can come with headaches. Thankfully, you are not alone. You have the right to legal counsel to represent your interests and advocate for your rights during the audit process. The attorneys at Goldburd McCone can help remove some of the headache and better ensure your rights are protected throughout the audit.