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Do you need to know the Tax Laws to win your audit?
To begin to understand the audit process start with the Revenue code or Tax code. The Tax code contains more than 6000 pages of fine print. To make matters more complicated, you have IRS Regulations, Revenue Rulings, Letter Rulings, Manuals, and Official Publications. This adds somewhere around 100,000 more pages of tax law. Also, there are thousands of court decisions telling us how the laws should be applied in individual cases. Therefore, the number of tax law pages exceeds one million! In other words, you will never understand all of the tax laws….but this may be to your advantage. Do you think most IRS auditors know the tax laws that well? If you said yes, then think again. The Tax Law is so voluminous and complex. To further complicate matters, the training and experience of IRS personnel is declining, but the tax laws are becoming more complicated. So you can bet that most tax auditors will stick to the basic issues. There are exceptions such as if you are a tax payer with a high level of income or if you have a more complicated tax issue then you will probably be assigned a more experienced auditor. If you spend a few hours learning basic tax laws (especially those pertaining to your issues) you can come out with minimum damage. It is a good idea to consult with a tax professional before talking to your auditor. Most audits are factual not legal so most people succeed in an audit not knowing the tax laws at all. |