Tuesday, October 10, 2023 – No one likes letters from the IRS – especially when the letter signals an audit! When the alarm bells of a tax audit ring, panic can ensue, and the immediate reaction is to pick up the phone and call: your accountant. Your accountant may have a deep understanding of your financial situation, but think twice before sending them out to represent you. Here are Three reasons hiring your accountant is a bad idea.
- Lack of Legal Privilege
Unlike attorneys, there isn’t any accountant/client privilege. That means your accountant may be required to expose sensitive information during an audit. Attorneys are shielded by the Attorney-Client Privilege. This privilege provides a secure environment for you to disclose all necessary information without fear that it might be used against you.
Unfortunately, conversations and correspondences with accountants may be scrutinized in an audit. So, be careful, your accountant may be required to expose your financial dilemmas and strategies.
- Training – Law, Negotiation, and Tactics
Your accountant may be a financial wizard but probably doesn’t have the training as an advocate, or negotiator. Remember, IRS Collections and examinations are a whole different area of the tax code than accounting. Tax attorneys possess a deep understanding of tax codes, precedent, and legal argumentation that can make all the difference in challenging the IRS’s claims and presenting a strong defense. - Preventing Conflicts of Interest
Remember, if your accountant was responsible for preparing your returns, they might inadvertently become part of the audit scrutiny. Their work, advice, and any errors or misjudgments they may have made will be under the microscope, potentially placing them in a position to defend their professional competency. If that happens, they may throw you under the bus.
When it comes to audits, don’t play games, hire a professional. You need an attorney with precise knowledge of tax law, negotiation capabilities, and a detached perspective. These qualities can pave the way for a more strategically sound, confidential, and strong defense against audit claims.
In the taxing times of audits (pun intended), remember that the right representative can be the linchpin in safeguarding your financial health against the scrutinizing eyes of the IRS.
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Steven A. Leahy is a tax attorney in Illinois. He was the host of the long-running popular Radio Show “The IRS Radio Hour” heard every Sunday evening on AM 560 The Answer. Attorney Leahy is also the author of the book “Deal With Your IRS Problems Today!” You can get a FREE copy of this important book at FreeIRSBook.com. Or Call 24/7 (312)664-6649
