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Avoiding IRS Audit Red Flags: IRS' DIF Score, LB&I vs. Correspondence Exams, Statutes of Limitation

Note: CLE credit is not offered on this program

Recording of a 110-minute CPE webinar with Q&A

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Conducted on Wednesday, July 6, 2022

Recorded event now available

This webinar will give a first-hand look at how the Internal Revenue Service selects tax returns for audit. Our IRS veteran will provide insights into the different levels of IRS examinations, appropriate responses, and how to avoid the expansion or escalation of an audit.

Description

There are indeed red flags that can raise a taxpayer's DIF score. Certainly, individuals submitting information that differs from amounts reported by third parties can expect a notice. But do rounded numbers, large deductions, or having a home office raise your DIF score? In 2019 the IRS audited only .4 percent of returns received. The agency is on a hiring spree, and increased audits are a certainty.

When a taxpayer is audited, taxpayers and practitioners should tailor responses based on the type of IRS audit and who is conducting the examination. An IRS inquiry could be face-to-face or conducted by mail, as a business or individual examination. Expectations of an LB&I examiner differ significantly from those of IRS personnel conducting a technical correspondence examination. Most concerning is that a low-level correspondence audit can blossom into an audit of a taxpayer's whole enterprise. Taxpayers and tax professionals need to know what items trigger an IRS audit and how to best respond to all types of IRS inquiries.

Listen as our experienced IRS consultant divulges red flags that could trigger an IRS audit and best practices for evading IRS inquiries.

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Outline

  1. IRS audits: introduction
  2. DIF score
  3. Audit triggers
  4. Types of audit
  5. Record retention
  6. Statutes of limitation
  7. Appeals

Benefits

The panel will review these and other critical issues:

  • How is the IRS' DIF score used to select tax returns for an audit?
  • What steps can tax professionals take to reduce the chances of a return being selected for audit?
  • What are the different types of examinations conducted by the IRS?
  • When does an audit of one return or item expand into an audit of all of a taxpayer's undertakings?
  • How should a tax practitioner respond to a mail-in audit request?
  • How do the applicable statutes of limitation affect an examination?

Faculty

Myers, Kelly
Kelly H. Myers
Tax Consultant
Myers Consulting Group

Mr. Myers is a valuable asset to the tax practitioner community. He speaks at numerous seminars and continuing...  |  Read More