Introduction

The Internal Revenue Service (IRS) conducts audits and examinations to ensure tax compliance and detect underreporting, fraud, or errors in tax filings. Businesses and individuals must be prepared to handle IRS audits efficiently to minimize financial risk, legal exposure, and potential penalties.

This 5-day IRS Audit and Examination training provides a structured approach to understanding the IRS audit process, taxpayer rights, compliance best practices, and strategies to manage and defend against audits effectively. The course includes real-world case studies, hands-on workshops, and practical solutions to navigate IRS examinations successfully.

Course Objectives

By the end of this course, participants will be able to:

• Understand the IRS audit selection process and triggers for audits.
• Navigate the different types of IRS audits and examination procedures.
• Ensure taxpayer rights and responsibilities are protected during an audit.
• Respond effectively to IRS notices and document requests.
• Implement audit defense strategies and resolve disputes efficiently.

Who Should Attend?

This course is ideal for:

• Tax professionals, accountants, and CPAs
• Business owners and corporate tax managers
• Financial controllers and CFOs
• Compliance officers and legal advisors
• Individuals and professionals at risk of IRS audits

No prior audit experience is required, but a basic understanding of U.S. taxation is beneficial.

Course Outline

Day 1: Understanding the IRS Audit Process

• Overview of the IRS audit and examination system
• How tax returns are selected for audit (random selection, red flags, and DIF scores)
• Types of IRS audits: Correspondence, Office, Field, and Taxpayer Compliance Measurement Program (TCMP) audits
• IRS enforcement priorities and audit focus areas
• Key statutes of limitations for IRS examinations

Workshop: Identifying potential IRS audit triggers in tax filings

Day 2: Responding to IRS Notices & Audit Preparation

• Understanding IRS audit notices: CP, Letter 566, Letter 2205, and 30-Day Letter
• Gathering and organizing supporting documents for an audit
• Communicating effectively with IRS agents
• How to request audit reconsiderations and extensions
• Common audit pitfalls and how to avoid them

Case Study: Drafting a response to an IRS audit request for documentation

Day 3: Navigating the IRS Examination Process

• How IRS auditors review tax returns and financial records
• Taxpayer rights and obligations during an IRS audit
• Handling requests for bank statements, receipts, and other financial records
• The role of third-party verification (1099s, W-2s, business transactions) in audits
• Ensuring proper record-keeping and substantiating deductions

Workshop: Conducting a mock IRS field audit with tax examiner role-play

Day 4: IRS Dispute Resolution & Appeals

• What happens after an audit: Possible adjustments, penalties, and settlements
• How to file an appeal with the IRS Office of Appeals
• Understanding alternative dispute resolution (ADR) methods
• Preparing for a Tax Court case: When litigation is necessary
• IRS penalty abatement and relief options (reasonable cause, first-time penalty abatement)

Case Study: Negotiating a settlement for an audit adjustment through IRS appeals

Day 5: IRS Criminal Investigations, Fraud Risks & Compliance Best Practices

• Differences between civil tax audits and IRS criminal investigations
• Recognizing tax fraud indicators (underreporting income, false deductions, offshore accounts)
• How to avoid IRS penalties and compliance risks
• Best practices for businesses and individuals to reduce audit risk
• Future trends in IRS enforcement and digital audits

Capstone Exercise: Developing a comprehensive IRS audit response strategy for a high-risk taxpayer

Conclusion & Certification

Participants who complete the course will receive a Certification in IRS Audit and Examination Defense, demonstrating expertise in handling IRS audits and ensuring compliance.

Program Benefits

• Comprehensive Coverage – Covers all aspects of IRS audits, from selection to resolution.
• Hands-On Learning – Includes case studies, role-play, and real-world applications.
• Audit Defense Confidence – Learn how to protect taxpayer rights and manage IRS disputes.
• Risk Reduction Strategies – Minimize the chances of an IRS audit with compliance best practices.
• Future-Proof Knowledge – Stay updated on IRS enforcement trends and digital audits.