Tax audit representation, sometimes called audit defense, is when a tax or legal professional acts on behalf of the taxpayer (a business or an individual) during an IRS or state income tax audit. Enrolled agents, CPAs, and tax attorneys are the types of qualified representatives who are allowed to stand in on the taxpayer’s behalf during an audit.

The IRS and all states allow a taxpayer to have an authorized representative act on their behalf. The representative must have permission to practice before the IRS or state. Specific credentials are required. You’ll need to grant Power of Attorney to your representative to enable them to handle everything. Once you’ve done this, you will most likely not even have to appear yourself.

You might think that bringing in a professional who deals with audit representation could possibly make the IRS or other tax agency think that you’re guilty. Actually, it will do quite the opposite. Your IRS agent will typically prefer to deal with an enrolled agent. They know that the requested information will be prepared in a way that’s easy for them to review. Additionally, the IRS knows that your agent will represent you in a professional and unemotional way. This is preferable to how you might respond if you were representing yourself.

An enrolled agent develops a strategy which will be used to defend the taxpayer’s position. They assist the taxpayer to prepare all documents requested by the IRS or other taxing authority. Your representative will handle all correspondence and attend all meetings on your behalf.

Once the audit is done, the agent will assess any taxes and penalties you owe.  However, remember that the assessment can always be appealed. The IRS may be willing to negotiate with your agent, primarily because they don’t want the case to drag on indefinitely. This is why it’s so beneficial to have good audit representation from an enrolled agent who is experienced with tax negotiation.  A good agent is one who is skilled at procuring a settlement for you. 

If the IRS has contacted you, and it’s more than you can handle on your own, make that call. Hiring an enrolled agent is always your best option!