Tax Audit Interview: Attend Alone or With Your CPA or Tax Attorney?

As a matter of policy, short of a summons, we usually do not let our clients be interviewed in an IRS audit. Why do we do that? First off, we believe one of the core tax help is to save the taxpayer from this interview.  Clients are typically nervous. They are not aware of the tax law and no one knows what a client may say to complicate the tax problem. Clients, out of fear, may also say something that could lead to criminal investigation. Who needs all that trouble?

Some argue that clients should not be interviewed except in the presence of a tax practitioner such as his CPA, his tax attorney or his enrolled agent.  We argue that because of the complication we mentioned that this should not happen…period.  Those who are open to let their client show up in the interview say that it may be beneficial if the client appears to be credible to take the client along to establish creditability. 

Granted, credibility cannot be minimized, but what will happen if the client is hit by a question he is not ready for and he started to stutter? The CPA may come in to the rescue, but why chance it? They also argue that there may be oral evidence that has to be submitted only through person to person and therefore they may need their client to present that evidence orally. In situations like this we ask our client to write a statement about the issue. We have the leisure to review the statement before the meeting and it is presented to the IRS auditor.

Whether a Field Audit or an Office Audit we alone sit in the interview. In a field audit, we ask that the IRS auditor conduct their audit in our office. In an office audit we send a package to the auditor and we also do not attend. The IRS auditor typically argues that he has to ask personal questions or in a case of business audit he may say something like he has to know the accounting procedures and the records they keep etc. Our typical response in this instance is to ask the IRS auditor to please write all his questions and we will get the answer and they usually end up doing.

As we have mentioned before if the tax audit is a business audit, IRS auditors usually would like to visit the premise. We accompany them in the tour.  They ask no questions of the taxpayer during that tour. We just introduce the taxpayer if he is available and a nod of heads and everyone will go to his business. Any conversation is considered to be an interview which we have already argued and mutually agreed that the IRS agent would not do.