Beyond Tax Season: Practice Before the IRS

Beyond Tax Season: Practice Before the IRS

The Internal Revenue Service is really starting to tighten its rules on who can and cannot represent clients

Budget issues may loom large in practice before the Internal Revenue Service in the sense that audits are becoming more thorough, according to Bill Smith, managing director for Top 10 Firm CBIZ MHM’s National Tax Office.

“The IRS budget issues will have a significant impact on how many returns will get audited,” he observed. “There seems to be a shift in an attempt to get more out of each audit, and to expand audits within taxpayer groups to make sure they get everything out of that audit,” he said.

“Instead of bringing in one agent who is a generalist and taking a broad-brush approach, they’re training agents to be specialists and bringing them in on specific issues,” he added.

The increased application of penalties by the IRS has not gone unnoticed by practitioners, according to Smith. “One of the things that’s been troubling us is that the IRS seems to apply a penalty to any deficiency they determine. It used to be that you had to do something negligent or egregious, but now it seems to be an automatic add-on,” he said.

“In the past, they might use the penalty as a trade-off in negotiating. Now, they just tack on the penalties and you have to fight for those. It’s a disturbing development. They’re not saying that this is their new policy, but it seems to be happening in virtually every audit I hear about.” Read more on Accounting Today.