IRS Tax Audit Representation
Attorney-client privilege and CPA expertise for your tax audit defense
A Tax Audit is frightening and dangerous. The IRS has broad authority to examine your returns, request documents, and assess additional taxes, penalties, and interest. Hire Denver Tax CPA Philip Falco for attorney-client privilege and the tax skill necessary to defend your return.
Recent Success
A plumbing business with $4 million in revenue was selected for a full IRS audit. The examination began as an employee/contractor reclassification issue and expanded into a comprehensive review of all income and expenses. The result: NO CHANGE — the IRS accepted the return as filed.
Bottom line: being both a CPA and an Attorney is invaluable in audit representation. The CPA training provides the technical tax expertise to address every issue. The Attorney training provides the legal strategy, privilege protection, and advocacy skills to defend your positions.
Audit Types We Handle
- Employee/contractor misclassification audits
- IRS 1099-K audits
- Business expense substantiation audits
- S Corporation audits
- Individual 1040 Schedule A and Schedule E audits
- Colorado CDR 104 state audits
- Audits during criminal investigations
- Colorado Department of Labor audits
- U.S. Department of Labor audits
- IRS audit trigger analysis
Our Goal: Containment and Conclusion
The goal in any audit is containment and conclusion. The greatest fear in an audit is scope expansion — the examiner discovering issues beyond the original scope and opening new lines of inquiry. Experienced representation keeps the audit focused and moves it toward resolution.
Employee/Contractor Misclassification
Employee versus independent contractor classification is one of the most heavily audited areas. The IRS applies a 20-factor test to determine worker status. When the IRS reclassifies workers, the resulting assessment includes back employment taxes, penalties, and interest — often amounting to tens or hundreds of thousands of dollars.
Making matters worse, agencies share findings. An IRS reclassification can trigger audits by the Colorado Department of Labor, the U.S. Department of Labor, and state workers' compensation authorities, leading to large cascading assessments.
What Competent Audit Representation Requires
- Attention to detail — every document matters, every number must be verified
- IRC mastery — deep knowledge of the Internal Revenue Code and Treasury Regulations
- Organization — presenting information clearly and systematically to the examiner
- Issue spotting — identifying problems before the examiner does
- Argument articulation — presenting legal and factual arguments persuasively
- Courage to defend — willingness to push back on unreasonable IRS positions
IRS Settlements, Appeals, and Tax Litigation
Not every audit ends at the examination level. When the IRS proposes changes you disagree with, we pursue every available remedy: reconsiderations, negotiations with the examiner's manager, and formal appeals. The IRS Appeals Office is an independent function within the IRS that settles most cases based on the hazards of litigation.
The Attorney-CPA Advantage
Attorney-client privilege is the single most important protection in an audit. Communications between you and your CPA are not fully privileged — particularly in criminal matters. CPA limited privilege does not extend to criminal investigations.
Only a dual-licensed Attorney-CPA provides reliable combined training: the legal privilege that protects your communications and the technical tax expertise to defend your return. This combination is rare and invaluable.
Types of IRS Audits
Field Audit
The most comprehensive type of examination. An IRS Revenue Agent comes to your place of business or your representative's office and conducts a thorough review of your books, records, and supporting documentation. Field audits typically involve business returns and high-income individual returns.
Office Audit
You are invited to bring specific documents to the IRS office for review. Office audits appear straightforward but contain booby traps — examiners may expand the scope based on what they observe during the appointment.
Correspondence Audit
The IRS sends letters requesting documentation or proposing changes to your return. These may involve math errors, filing status questions, or document verification. While they seem simple, failing to respond properly can result in the IRS making changes without your input.
Call (303) 626-7000 to discuss your audit with Philip Falco, Attorney and CPA.
Ready to Get Started?
Contact Philip Falco, Attorney & CPA, for expert tax representation in Denver.