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Getting Audited - Get Legal Representation

February 8, 2014

Taxes - Tax AuditorNo one enjoys an income tax audit and most people don’t like to hire a lawyer. But if the first circumstance befalls you, don’t make it worse by not doing the second.

As much as we may gently criticize the IRS for its outdated computer system, baffling bureaucracy and complex tax code, the IRS has serious judicial authority when it comes to collecting taxes.

After the IRS has exhausted its ability to locate easy-to-find assets, such as bank accounts, and real estate, to satisfy any unpaid liability, it may look for assets kept at a taxpayer’s home or place of business. Jewelry, artwork, antiques, and appliances can all be seized and sold by the IRS at auction to raise cash.

It’s a simple process for the IRS. All it has to do is apply for a court order to enter a business or personal premises for the purpose of effecting a levy. Generally, the IRS must establish that a tax liability is owed, that it has sent notices demanding payment, and that the taxpayer has either neglected or refused to pay the tax owed.

Most of the requirements for the IRS to get the court order come from the execution of legal procedures, because the IRS has to conform to laws that regulate creditors.

You are not required to have legal representation before the IRS, but with the legal authority the IRS has at its disposal, can you really afford not to have someone representing you? Statistics show conclusively that people with representation fare much better in audits than those without.

Of course, the best time to find legal assistance is when you don’t need it. If you haven’t done so already, make it a point to find someone to be your legal representative in tax issues.