When the IRS sends you an audit notice, it’s natural to feel overwhelmed or nervous. The audit process can be daunting, time-consuming, and result in significant financial consequences. At Tomes Law Firm, each IRS audit lawyer understands the stress and concerns that come with an audit. We’re here to guide you through the process, protect your rights, and work toward a favorable resolution.

Why Choose a Tomes Law Firm as Your IRS Tax Auditor?

If you searched for an NJ “tax lawyer near me,” you found Tomes for a reason. We’re a leading IRS tax auditor with a strong reputation in New Jersey and beyond. Our team specializes in resolving sensitive tax disputes, including audits by the IRS and federal tax litigation. We have a track record of securing positive outcomes for our clients, especially when dealing with complex civil and criminal tax law issues.

Experienced IRS Lawyers on Your Side

Our New Jersey tax audit lawyers collectively bring over 80 years of experience to the table. We’ve worked diligently as NJ tax attorneys and audit lawyers, providing unparalleled insight into how IRS agents conduct audits and enforce U.S. tax laws and regulations. When you turn to us, you’re tapping into a wealth of knowledge and expertise.

Support Throughout the Audit Process

We understand that an IRS audit can be a stressful experience, which is why we act swiftly to provide you with the legal advice and skilled representation you need. Your IRS audit lawyer will take the time to demystify the process, ensuring you’re fully aware of your legal rights, options, and obligations at every step.

Resolving Disputes Efficiently

Our primary goal is to resolve tax disputes as quickly as possible, utilizing the IRS audits and appeals processes. However, we also acknowledge that not all cases can be resolved administratively. In such situations, we’re fully prepared to vigorously represent you at all levels of the federal court system.

Choosing the Right Forum for IRS Federal Tax Litigation

In the event your tax dispute cannot be resolved through administrative procedures, our legal team will carefully review your case to determine the most appropriate forum for litigation. We have extensive experience practicing before various federal forums that handle IRS tax cases. Here are some of the key forums:

  • U.S. Tax Court: In most cases, IRS federal tax cases are heard before the U.S. Tax Court, an exclusive venue for tax controversies. Cases are presided over by judges experienced in tax law, and taxpayers are not required to pre-pay their tax deficiencies until a final decision is rendered.
  • U.S. District Courts: To bring a case before a U.S. District Court, taxpayers must have exhausted all available IRS administrative remedies. Unlike the U.S. Tax Court, taxpayers are required to pre-pay the tax deficiency before litigating the dispute. This court is unique in that cases may be tried before a jury.
  • U.S. Court of Federal Claims: Taxpayers also have the option to have their case heard before the U.S. Court of Federal Claims. Cases here are heard by a single judge, and taxpayers are required to pre-pay the tax amount due before the case proceeds.

Don’t Face an Audit Alone – Partner with a Renowned IRS Tax Auditor

Facing an IRS audit is a challenging experience, and it’s crucial to have the right legal team by your side. Tomes Law Firm NJ tax attorneys have the experience and knowledge to guide you through the process and protect your rights. We’re committed to achieving the best possible outcome for you, whether it’s through the audit and appeals processes or by litigating your case in federal courts.

Contact us today at 732-333-0681 to schedule a consultation and get the experienced representation you need during your IRS audit.

Frequently Asked Questions About IRS Audits

What Is an IRS Audit?

An IRS audit is a review of a taxpayer’s tax return, financial records, and supporting documentation to determine whether income, deductions, credits, and other tax items were reported correctly. While many taxpayers assume an audit means the IRS believes they committed fraud, most audits are simply examinations of specific items that appear unusual or inconsistent.

The IRS uses computerized systems to identify returns that may warrant review. Audits can be conducted by mail, in an IRS office, or in more complex cases at the taxpayer’s home or business. During the audit process, the IRS may request bank statements, receipts, invoices, mileage logs, business records, and other documents supporting information reported on the return.

An audit does not automatically mean additional taxes will be assessed. Some audits result in no changes, while others may actually reveal that the taxpayer is entitled to additional deductions or credits. However, if the IRS determines errors exist, it may assess additional taxes, penalties, and interest.

Taxpayers have rights during the audit process, including the right to representation and the right to appeal adverse findings. Understanding these rights is often critical to protecting financial interests during an examination.

How Likely Am I To Be Audited By The IRS?

The likelihood of an audit depends on several factors, including income level, the complexity of the return, and the types of deductions or credits claimed. While audit rates have declined over the past decade, certain taxpayers remain more likely to be selected for examination.

Higher-income individuals generally face greater audit risk because the potential tax adjustments are often larger. Self-employed taxpayers, business owners, and individuals reporting significant cash transactions may also attract additional scrutiny.

The IRS relies heavily on automated systems that compare tax returns against statistical norms. Returns containing items that fall significantly outside expected ranges may receive higher audit scores.

Certain activities commonly associated with increased audit risk include:

  • Large charitable deductions
  • Significant business expenses
  • Multiple years of business losses
  • Cryptocurrency transactions
  • Foreign financial accounts
  • High-income tax returns
  • Large real estate losses

Most taxpayers will never experience an audit, but maintaining accurate records remains essential because the IRS may examine returns years after they are filed.

What Are The Most Common IRS Audit Triggers?

Several factors commonly cause the IRS to take a closer look at a tax return.

One of the most common triggers is unreported income. The IRS receives copies of Forms W-2, 1099, K-1, and other information returns. If the income reported on a tax return does not match IRS records, the return may be flagged automatically.

Other common audit triggers include:

  • Excessive deductions compared to income
  • Large charitable contributions
  • Repeated business losses
  • Home office deductions
  • Significant travel expenses
  • Cryptocurrency activity
  • Rental property losses
  • Cash-intensive businesses
  • Foreign accounts and assets

Importantly, claiming legitimate deductions does not automatically increase audit risk. Problems typically arise when deductions are unsupported, inconsistent, or appear unusually large compared to similar taxpayers.

Maintaining detailed documentation is often the best defense against audit-related issues.

Can The IRS Audit Multiple Years At Once?

Yes. Although many audits begin with a single tax year, the IRS may expand the examination if it identifies issues that appear to affect multiple returns.

For example, if an auditor discovers recurring errors involving business expenses, unreported income, or deduction calculations, additional years may be opened for review. In some situations, audits may expand to include several years of returns.

The IRS generally has three years from the filing date to audit a return. However, that period may be extended to six years if substantial income was omitted. In cases involving fraud or failure to file, there may be no statute of limitations at all.

Because audit findings can affect multiple years simultaneously, taxpayers should carefully evaluate the potential scope of an examination before providing records or making statements to the IRS.

How Long Does An IRS Audit Take?

The length of an audit depends on its complexity, the availability of records, and the responsiveness of both the taxpayer and the IRS.

Simple correspondence audits may conclude within a few months. More complicated audits involving businesses, multiple tax years, or substantial documentation can continue for a year or longer.

Several factors influence audit duration:

  • Volume of records requested
  • Complexity of transactions
  • Number of years under examination
  • IRS staffing levels
  • Appeals or disputes arising during the audit

Many audits take longer than taxpayers expect because IRS personnel frequently handle numerous cases simultaneously. Prompt responses and organized documentation can often help move the process forward more efficiently.

Can I Represent Myself During An IRS Audit?

Yes. Taxpayers have the right to represent themselves during an IRS audit. However, self-representation may not always be advisable, particularly when significant tax liabilities, business records, or complex legal issues are involved.

One advantage of professional representation is that communications with the IRS can often be handled through the representative, reducing stress and minimizing opportunities for misunderstandings.

Taxpayers frequently make mistakes during audits by:

  • Providing unnecessary information
  • Making inaccurate statements
  • Failing to organize documentation
  • Overlooking procedural rights

Professional representation may help ensure the audit remains focused on the issues under examination while protecting the taxpayer’s interests throughout the process.

What Documents Should I Keep For An IRS Audit?

Taxpayers should retain documents supporting all income, deductions, credits, and expenses reported on their tax returns.

Examples include:

  • W-2 forms
  • 1099 forms
  • Bank statements
  • Business records
  • Receipts
  • Mileage logs
  • Mortgage statements
  • Property records
  • Charitable donation receipts
  • Medical expense documentation

The IRS generally recommends keeping records for at least three years after filing. However, longer retention periods may be appropriate depending on the nature of the transaction and applicable statutes of limitation.

Good recordkeeping often determines whether a taxpayer successfully defends deductions during an audit.

What Happens If I Lose An IRS Audit?

If the IRS determines additional tax is owed, it will issue examination findings outlining the proposed adjustments.

The taxpayer may:

  • Agree with the findings
  • Negotiate disputed issues
  • Request a conference with a supervisor
  • File an appeal
  • Challenge the determination in Tax Court

Losing an audit does not necessarily mean the taxpayer has exhausted all options. Many disputes are resolved through the IRS Appeals Office, which operates independently from examination personnel.

Understanding available appeal rights is often critical when significant liabilities are involved.

Can The IRS Audit My Small Business?

Yes. Small businesses are audited regularly, particularly when significant deductions, losses, or cash transactions are reported.

Common business audit issues include:

  • Vehicle expenses
  • Travel expenses
  • Meals and entertainment
  • Independent contractor classifications
  • Payroll compliance
  • Cash receipts
  • Inventory reporting

Small business owners should maintain organized financial records and separate personal and business expenses whenever possible.

Proper bookkeeping can significantly reduce audit exposure and improve the ability to defend deductions.

Can The IRS Audit Cryptocurrency Transactions?

Yes. Cryptocurrency remains a major enforcement priority for the IRS.

The IRS has increased efforts to identify taxpayers who fail to properly report cryptocurrency transactions, including sales, exchanges, staking income, and mining income.

Taxpayers may receive audit inquiries if IRS data suggests cryptocurrency activity was not accurately reported.

Maintaining detailed transaction records is essential because many cryptocurrency exchanges provide incomplete tax reporting information.

What Happens During A Correspondence Audit?

A correspondence audit is conducted entirely through the mail. The IRS sends a letter requesting specific documentation supporting items reported on a return.

Common issues include:

  • Charitable deductions
  • Dependents
  • Education credits
  • Medical expenses
  • Business expenses

The taxpayer submits supporting documentation by mail or electronically. After reviewing the materials, the IRS issues a determination.

Correspondence audits are generally less intrusive than field audits but should still be taken seriously.

Can The IRS Audit Cash Businesses More Often?

Cash-intensive businesses often face increased scrutiny because income can be more difficult for the IRS to verify independently.

Examples include:

  • Restaurants
  • Construction companies
  • Salons
  • Convenience stores
  • Landscaping businesses

The IRS may compare reported income against industry averages and financial ratios to identify discrepancies.

Maintaining complete sales records and accurate bookkeeping is especially important for businesses that regularly handle cash.

Can I Appeal An IRS Audit Decision?

Yes. Taxpayers have significant appeal rights after an audit.

The IRS Appeals Office provides an independent review process designed to resolve disputes without litigation whenever possible.

Many audit adjustments are reduced or modified during appeals because appeals officers evaluate both the facts and the likelihood of success if the matter proceeds to court.

Appeals often provide taxpayers with a meaningful opportunity to resolve disagreements on favorable terms.

What Should I Never Say To An IRS Auditor?

Taxpayers should always answer questions truthfully. However, volunteering unnecessary information can create additional issues.

Common mistakes include:

  • Guessing when unsure
  • Speculating about records
  • Making unsupported statements
  • Providing documents that were not requested
  • Discussing unrelated tax years

Responses should be accurate, concise, and limited to the matters under examination.

Preparation before meetings with the IRS can help avoid misunderstandings that may expand the scope of an audit.

When Should I Hire A Tax Audit Attorney?

Taxpayers should strongly consider professional representation when:

  • The audit involves a business.
  • Multiple years are under review.
  • Significant tax liabilities are at stake.
  • Payroll taxes are involved.
  • Fraud allegations may exist.
  • Records are incomplete.
  • The IRS has expanded the audit.

Early representation often helps control the scope of the examination, protect procedural rights, and improve overall outcomes.