Do I Need An Attorney Present At My IRS Audit?

Saying that IRS audits are scary is a little like saying water is wet, in that everyone knows it. But to take the water analogy in a different direction, audits are often scary in the same way that deep, unfamiliar water is scary when you don’t know how to swim. As long as you’re on shore or in a nice, sturdy boat, you’re fine…but the idea of falling in, however unlikely it may be, is frightening.

Less than 1% of tax filers ever get audited, but because the audit is a huge unknown and has a reputation of harsh consequences, people tend to be very nervous just thinking or talking about it. Unfortunately, this can lead to some important questions going unanswered. For example: do I need an attorney present at an audit?

Given the aura of anxiety around audits, it may make sense to bring a tax attorney with you. After all, it’s their job to understand audits, to represent you to the IRS, to deal with things like tax resolution, etc. Their experience and perspective almost certainly outweighs yours, so their presence may well be a helpful comfort.

But do you need one? Not usually. For one thing, even if you do get audited, most audits happen by mail. In fact, all audits start out by receiving a letter from the IRS. These paper audits are most often simply questioning something you reported on your taxes—perhaps a charitable donation, a home office deduction, or something similar. Most of the time all you’ll need to do is provide additional documentation to show that the item was reported correctly on your return. Sometimes you’ll need to pay some additional money, especially if the audit is letting you know of a mistake you made in your accounting.

It’s rare for most audits to move beyond this preliminary stage. And even if they do, if you receive a second letter that discounts or contradicts the documentation you sent and/or requests an in-person meeting, you’re better off hiring an accountant than a tax attorney. In truth, the only time you really need a tax attorney for an audit is when the audit accuses you of a crime like tax evasion or fraud. In those cases, having a legal expert on your side will do a lot more than provide peace of mind—it could keep you out of jail! So if an audit ever goes to that level of severity, by all means hire an attorney. But up until that point, you really can handle most issues an audit might throw at you by yourself.

To revisit our first analogy, dealing with an audit is a lot like learning to swim. Before you do it, you might want to have a lifeguard follow you around anytime you’re near deep water. But once you learn some basic strokes and have some confidence in yourself, you only need the professional when things really get bad.