by Tony Novak, CPA, MBA, MT revised May 2015
Audits are a common component of our tax compliance system. Most audit inquiries are "machine generated" and can be quickly and easily resolved with a correction of the filing documents. Other times a taxpayer is randomly selected for a more intensive audit. In other cases the IRS or taxing authority has good information to believe that additional taxes are due. In many cases an audit can be completely addressed by correcting a tax reporting error.
Terms like "audit assurance", "audit insurance" and "audit protection" are used seemingly indiscriminately in the tax preparation and representation industries. This web page is designed to describe specifically what I mean when using the term audit assurance.
I offer audit assurance on all of the paid tax services that I provide including self-filed returns at 1040.com. Audit assurance is not offered on unpaid tax services or when there is an open or ongoing billing dispute or unpaid bill.
If you self-file your tax return at 1040.com then this audit assurance is only valid if you send a copy of your confirmation of filing email to firstname.lastname@example.org at the time of filing. My response email included a receipt that the audit assurance is in effect. Your confirmation sent at a later date or at the time of audit will not be valid for audit assurance service.
The purpose of my audit assurance service is to alleviate the emotional stress that typically accompanies a notice of audit from the IRS or other taxing authority. The purpose of this service is not to transfer the financial risk of an adjustment in tax liability.
Audit Assurance Service:
If your tax return is audited, I will speak with you about it and answer the audit inquiry in writing in a timely manner at no additional charge. "Timely manner" in this case means within 14 days after you present me with the notice of audit. "Answer" means the initial required response, but does not mean the entire subsequent activity, including recalculation, proofs and rebuttals, if any.
In some cases an audit inquiry cannot be answered in a single written response. This no additional cost audit assurance service does not include anything other than the single written response. After the initial response, the cost of any ongoing audit response is allocated based on the underlying cause.
If the underlying cause of the audit is my error or oversight, then I will complete the entire audit response at no additional charge. If the underlying cause of the audit is some reason other than my error or oversight then there will be a fee for completion of the rest of the audit response, if any, beyond the initial answer.
You are solely responsible for any additional tax, interest or penalty is the result of the audit. Neither my tax services nor this audit assurance service should be presumed to be an assumption of financial liability for any tax, interest or penalty by me.
Opinions expressed are the solely those of the author and do not represent the position of any other person, company or entity mentioned in the article. Information is from sources believed to be reliable but cannot be guaranteed. Any accounting, business or tax advice contained in this communication, including attachments and enclosures, is not intended as a thorough, in-depth analysis of specific issues or a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. Tony Novak operates as an independent adviser under the trademarks "Freedom Benefits", "OnlineAdviser" and "OnlineNavigator" but is not a representative, agent, broker, producer or navigator for any securities broker dealer firm, federal or state health insurance marketplace or qualified health plan carrier. He has no financial position in any stocks mentioned. Novak does work as an accountant, agent, adviser, writer, consultant, marketer, reviewer, endorser, producer, lead generator or referrer to other companies including the companies listed in the articles on this web site.