Your Guide to Audit Assistance Tax Software

Along with needles, public speaking, and death, most people fear tax audits. However, there is no reason to be scared, as paperless audit software solutions provide cheap or free audit assistance are available. This article provides information on how your tax software product’s IRS audit help works.

Difference between ‘audit representation’ and ‘audit guidance’

Guidance is also called support or assistance. It aids you to comprehend what’s happening. In contrast, “representation” means a tax expert will talk to the IRS about your tax situation.

A lot of tax software vendors provide free guidance. Representation is typically an add-on product that costs $20 to $50. This is a good deal if you‘re audited, as hiring a tax attorney to represent you is expensive. For instance, tax experts charge about $129 on average to craft an IRS audit response letter on your behalf and $150 an hour to represent you in person during the audit. Further, the median retainer cost of a tax lawyer is $770, as per the National Society of Accountants.

Third-Party Help

Tax software vendors mainly focus on product development and mayo, outsource the IRS audit help package to a third-party partner. If you get an IRS notice, you must contact the audit assistance provider, who’ll verify your coverage. Then, you need to give them copies of your filed tax return and the IRS letter. If you want representation, you should sign a document authorizing a tax expert to represent your case to the IRS.

Ask for a Specific Attorney

You should ask that a specific expert represents you. Depending on the audit’s nature and the provider, your representative could be in a different city. You must interact with them mainly via secure data websites, phone calls, and emails. Or the provider may allot you a local representative who will consult with you in person.

No Freebies

Audit protection will not remove taxes you may owe legitimately or make your audit go away. You’ll still be held responsible for what you reported in your return. So don’t exaggerate or stretch your tax reporting simply because you purchased an audit package. The facility cannot perform any magic for you. For instance, if you do not possess documentation that supports the deductions questioned by the IRS, your audit protection package cannot change that.

There May Be No Need for It

Your coverage for a particular tax return will be active for the time your return is auditable,, generally 3 years. For instance, if you purchased coverage for your tax return in 2019, but the IRS audits it only in 2018, your 2016 tax return coverage will still be valid.

However, you need not feel any anxiety about audits as in any given year, the IRS audits only a negligible percentage of all individual returns. This percentage is lower for income amounts up to $200,000. However, if you are still haunted by audit worries, you should learn more about the coverage features offered by your tax solution. If the IRS does select you for an audit, you can save a lot of hassle, time, and money attempting to handle it yourself.