Receiving a letter from the IRS can stop you in your tracks. Whether you’re an individual or business owner, that moment of panic, seeing the words “audit” or “examination”, can quickly spiral into confusion, anxiety, and fear.
But here’s the truth: not all audits are catastrophic, and you’re not alone. With experienced IRS audit defense, you can protect your finances, assert your rights, and resolve the issue with clarity and confidence.
At Dimov Audit, we’ve helped hundreds of clients navigate IRS audits successfully. From initial notice to final resolution, we offer expert representation that removes uncertainty from the process. Here’s how to respond, and why professional help can make all the difference.
Why the IRS Selects Returns for Audit
IRS audits can feel random, but they typically fall into a few categories. The IRS might be seeking more information, looking for inconsistencies, or using algorithms to flag unusual patterns.
Here’s how and why your return might be selected:
- Mismatch with third-party forms (e.g., W-2, 1099): Discrepancies trigger automatic flags.
- High deductions or credits relative to income: Especially charitable donations, home office expenses, or business losses.
- Self-employed returns: Sole proprietors often face greater scrutiny due to a lack of third-party reporting.
- Crypto transactions or foreign assets: These are now IRS hot zones.
- Random selection: Some audits are purely statistical quality checks.
Understanding why you were selected can help tailor your defense strategy from the outset.
Types of IRS Audits You Might Face
There isn’t just one kind of IRS audit. The type you’re facing influences how serious the situation is and what kind of defense you’ll need.
Here’s how IRS audits are classified:
- Correspondence Audit: Done by mail, usually for simple issues like a missing form or explanation of deductions.
- Office Audit: Conducted at an IRS office; requires in-person attendance and supporting documentation.
- Field Audit: The most serious type, where the IRS visits your home or business.
- Taxpayer Compliance Measurement Program (TCMP): Extremely detailed, rare audits used for data collection.
Dimov Audit represents clients in all audit types, ensuring you respond accurately, completely, and without overexposing your return to further scrutiny.
First Steps After Receiving an Audit Notice
The most important thing you can do after receiving an IRS notice? Don’t ignore it.
Here’s how to take control:
- Read the notice carefully: It will tell you what’s being audited, the tax year involved, and the deadline to respond.
- Don’t panic or contact the IRS impulsively: Avoid volunteering information. It’s better to have professional representation speak on your behalf.
- Gather documentation: Begin compiling relevant records (receipts, statements, mileage logs, etc.).
- Consult with a tax professional: A qualified audit defense firm can review the notice, identify the real risk, and build a strategy.
Dimov Audit can step in immediately to represent you, so you never have to speak with the IRS directly.
What IRS Auditors Are Looking For
IRS examiners don’t always believe you’ve done something wrong; they’re simply verifying reported information. But make no mistake: if they uncover misreporting, underpayment, or negligence, the consequences can escalate.
Here’s what IRS agents typically investigate:
- Substantiation of deductions or credits: Can you prove your claims with documents?
- Unreported income: From side gigs, crypto, foreign accounts, or 1099s.
- Business expenses: Are they legitimate, ordinary, and necessary?
- Cash flow vs. lifestyle: Is your reported income consistent with your spending?
Our role at Dimov Audit is to ensure your documents speak clearly, and only as much as necessary. Over-disclosure is one of the biggest mistakes unrepresented taxpayers make.
Your Rights During an IRS Audit
Many taxpayers don’t realize that they have rights even during an audit. The IRS is required to follow specific procedures, and knowing your protections can make the process far less intimidating.
Here’s what you’re entitled to:
- Right to representation: You don’t have to deal with the IRS alone. An enrolled agent, CPA, or tax attorney can speak on your behalf.
- Right to appeal: If you disagree with the audit findings, you can request a review or file a formal appeal.
- Right to understand the process: The IRS must explain what they’re examining and why.
- Right to courteous treatment: IRS agents must act professionally; intimidation or aggression is not acceptable.
Dimov Audit ensures your rights are upheld throughout the process and that you never feel overpowered or misinformed.
Penalties You Could Face Without Proper Defense
Audits don’t always end with a simple adjustment. If the IRS finds significant issues, they can impose serious penalties:
- Accuracy-related penalties: Up to 20% of the underpayment amount
- Negligence or disregard of rules: Also up to 20%
- Substantial understatement of income tax: Can trigger further financial penalties
- Civil fraud penalties: Up to 75% of the underpayment for willful errors
- Criminal charges: In rare cases, for intentional fraud or evasion
With Dimov Audit’s experienced defense, you avoid triggering additional scrutiny, negotiate from a position of strength, and protect your finances.
How Dimov Audit Builds an IRS Audit Defense Strategy
Every audit is different, but Dimov Audit follows a proven process to secure the best possible outcome for each client.
Here’s how we help:
- Thorough review of your IRS notice and return: We determine exactly what the IRS is questioning.
- Customized document request management: We collect only the relevant records and organize them to minimize red flags.
- Direct IRS representation: We communicate with auditors on your behalf, by mail, phone, or in person.
- Risk mitigation: If issues are found, we help you correct them, reduce penalties, and pursue appeals if necessary.
- Audit-ready planning for future years: We don’t just solve the problem, we help prevent it from happening again.
Our clients often tell us that after our first call, their anxiety dropped by half. Clarity is a powerful antidote to audit stress.
Special Considerations for Business Audits
If your business is facing an audit, especially as a sole proprietor, LLC, or S-corp, the complexity increases. The IRS may look at:
- Payroll compliance
- Business deductions
- Inventory and cost of goods sold
- Related-party transactions
- 1099 compliance
Dimov Audit supports business owners with everything from QuickBooks clean-up to year-by-year audit reconstruction. We understand how to present your records in a format IRS agents respect and accept.
What If You Disagree with the Audit Outcome?
If the audit doesn’t go in your favor, you have recourse:
- Request a meeting with the IRS manager
- File an appeal with the IRS Office of Appeals
- Take your case to Tax Court (if necessary)
Dimov Audit guides clients through the appeals process, often resolving disputes without needing to escalate. When warranted, we’ll take the IRS to task, legally and professionally.
Reach Out Today for Professional IRS Audit Defense
An IRS audit may feel like the end of the world, but it’s really just a process. And like any process, it’s manageable with the right expertise and preparation.
At Dimov Audit, we’re not just accountants, we’re your advocate when the IRS comes knocking. We protect your rights, guide you through each step, and ensure your audit ends with the least financial and emotional impact possible.
Received an IRS audit notice? Let Dimov Audit handle it. Contact us today for proven IRS audit defense that puts your peace of mind first.