Audit Defense & Tax Representation
Got a notice from the IRS or state? Don't panic, we'll handle the response, protect your rights, and guide you through every step.
Enrolled Agent representation for IRS audits, state tax examinations, sales tax audits, and compliance resolution. Colorado-based, serving clients in all 50 states.
⏰ Time matters, audit deadlines are strict. The sooner we review your notice, the more options you have.
An Audit Isn't the End, It's a Process We Can Manage.
Most audits are simply requests for documentation or clarification. With the right representation, many issues can be resolved quickly and professionally. You don't have to face this alone.
Reduce Stress & Confusion
We take the burden off your shoulders and handle communications directly.
Accurate Responses
Help proper documentation and substantiation for every claim.
Protect Your Future
Minimize assessments, penalties, and long-term financial impact.
Comprehensive Audit Defense Services
From IRS notices to state audits, we provide complete representation and resolution support.
IRS & Federal Audit Support
- IRS Audit Representation and Response Handling
Full representation before the IRS
- Documentation & Substantiation Support
Organize and present your records
- Audit Communication Management
We speak to the IRS for you
- Schedule C and Business Expense Audit Defense
Defend your deductions
- Income Matching & Reporting Clarifications
Resolve discrepancy notices
- Correspondence Audit Response
Handle mail audits efficiently
State & Local Tax Audits
- Colorado Department of Revenue Audit Support
State income and sales tax defense
- Multi-State Tax Agency Audit Assistance
Handle audits across states
- Sales & Use Tax Audit Representation
Defend your sales tax compliance
- Payroll Withholding Audit Support
State payroll examination help
- Local Jurisdiction Audit Defense
City and county tax audits
- State Income Tax Examination Support
Resolve state tax disputes
IRS Notices & Compliance Resolution
- CP2000 Notice Response Support
Underreporter notice resolution
- Underreported Income Notices
Explain income discrepancies
- Penalty & Interest Review and Mitigation
Reduce what you owe
- Payment Plan & Resolution Guidance
Installment agreement setup
- Innocent Spouse Relief Assistance
Protect from spouse's tax liability
- Trust Fund Recovery Penalty Defense
Payroll trust fund disputes
Business & Entity Audit Issues
- S-Corp and Partnership Audit Support
K-1 and entity-level reviews
- Payroll Classification Audits
Worker classification defense
- Employee vs Contractor Determination Defense
Prove proper classification
- Fringe Benefit & Expense Audits
Defend employee benefits
- Reasonable Compensation Reviews
S-Corp salary compliance
- Multi-Entity Audit Coordination
Complex structure defense
Payroll & Employment Tax Audits
- 941/940 Filing Issue Resolution
Federal payroll tax disputes
- Worker Misclassification Defense
Contractor vs employee issues
- Unpaid Payroll Tax Resolution
Back payroll tax help
- State Unemployment Audit Support
SUTA examination defense
- Trust Fund Penalty Negotiation
Reduce personal liability
- Employment Tax Compliance Review
Proactive compliance check
Audit Prevention & Planning
- Pre-Audit Compliance Review
Find issues before the IRS does
- Record Retention Best Practices
Keep the right documents
- Audit Risk Assessment
Identify red flags
- Documentation Systems Setup
Organize for protection
- Annual Compliance Check-Ups
Stay audit-ready
- IRS Representation Authorization (POA)
Power of Attorney setup
We don't just respond to audits, we represent you, protect your rights, and work toward the best possible outcome.
Just Received a Notice? Take a Deep Breath.
We review IRS and state notices the same day you contact us. You don't have to figure this out alone, that's literally what we do.
Types of Audits We Handle
Whether it's a simple letter from the IRS or a complex field audit, we have experience defending clients across all audit types.
IRS Correspondence Audits
Letter audits requesting documentation for specific items on your return.
Common triggers: Missing forms, income discrepancies, deduction questions
IRS Office Audits
In-person examinations at an IRS office covering multiple return items.
Common triggers: Business expenses, rental losses, complex returns
IRS Field Audits
Comprehensive on-site audits for businesses and high-income individuals.
Common triggers: Large businesses, complex entities, significant deductions
Sales & Use Tax Audits
State and local examinations of sales tax collection and remittance.
Common triggers: Nexus questions, exemption certificates, rate accuracy
Payroll & Employment Tax Audits
Reviews of worker classification, withholding, and employment tax compliance.
Common triggers: 1099 vs W-2, unpaid taxes, misclassification claims
State Income Tax Audits
State-level examinations of business and individual income tax returns.
Common triggers: Residency disputes, apportionment issues, credits claimed
Not sure what type of audit you're facing? We'll review your notice and explain exactly what's happening.
Get a Free Notice ReviewIRS Audit Defense, In Depth
Correspondence · Office · Field Audits · Notice Response
The IRS conducts approximately 600,000 audits per year. While your odds of being audited vary by income level, filing complexity, and industry, when it happens to you, nothing else matters. We've represented individuals and businesses through every type of IRS examination. Here's exactly what each one involves and how we defend you.
Correspondence Audits (Mail Audits)
~75% of all IRS auditsThe most common type of IRS audit. You receive a letter requesting documentation for specific items on your return, charitable contributions, unreported income, missing forms, or questioned deductions. These are often the easiest to resolve, but ONLY if handled correctly. A poorly written response can escalate a simple inquiry into a full examination.
What We Do:
Office Audits (In-Person at IRS)
~15% of IRS auditsYou or your representative are asked to appear at an IRS office with documentation for multiple items on your return. Office audits typically cover broader issues, business expenses, rental losses, itemized deductions, or multiple income sources. The IRS examiner reviews your records in real-time and asks questions. What you say in that room matters. We attend these on your behalf so you don't have to.
What We Do:
Field Audits (IRS Comes to You)
~10% of IRS audits, highest stakesAn IRS Revenue Agent visits your business or your tax professional's office to conduct an in-depth examination. Field audits are reserved for businesses, high-income individuals, complex returns, and cases with significant potential tax liability. These can cover multiple tax years and every line item on your return. Field audits require the most sophisticated defense strategy.
What We Do:
IRS Notices We Handle Every Day
Not every IRS letter is an audit, but every one requires attention. Here are the most common notices we help clients resolve, along with what's at stake and how quickly you need to act.
The IRS received information (1099s, W-2s, K-1s) that doesn't match what you reported. This is NOT an audit, it's an automated mismatch notice. But if you don't respond correctly, the IRS will assess the proposed changes automatically, plus penalties and interest. Many CP2000 notices are wrong or overstated because the IRS doesn't account for cost basis, timing, or proper categorization.
Similar to a CP2000 but asks you to explain the discrepancy rather than proposing specific changes. This is your opportunity to explain before the IRS makes assumptions. A well-documented response here can prevent the issue from escalating to a formal examination.
After an audit, the IRS sends this letter with proposed changes and gives you 30 days to agree or file a formal protest. This is a critical decision point, agreeing means you accept the assessment. Filing a protest moves your case to IRS Appeals, where we often achieve significantly better outcomes.
This is the IRS's final determination before they can legally assess additional tax. You have exactly 90 days to petition the U.S. Tax Court. Missing this deadline means you lose your right to challenge the assessment in Tax Court. This is a hard deadline with no extensions.
The IRS intends to seize your assets, bank accounts, wages, or property. This is an enforcement action that requires immediate response. You have rights under the Collection Due Process provisions, including the right to a hearing. Acting quickly can stop the levy and open negotiation options.
Every IRS Notice Has a Deadline
Missing an IRS deadline doesn't make the problem go away, it makes it worse. The IRS will assess the proposed changes by default, and your options for appeal narrow dramatically. The moment you receive a notice, the clock is ticking. Contact us immediately for a free notice review.
State Tax Audit Defense
Colorado DOR · Multi-State · Residency · Nexus Disputes
State tax audits are increasing as revenue departments adopt data analytics and inter-state information sharing to identify non-compliant businesses and individuals. Each state has its own rules, deadlines, protest procedures, and enforcement tactics. A strategy that works in Colorado may be completely wrong for California or New York. We understand the nuances of state-level enforcement and build defense strategies tailored to each jurisdiction's rules and tendencies.
Colorado Department of Revenue Audits
Colorado presents unique sales tax challenges. With 70+ home-rule cities that administer their own sales tax independently, a Colorado audit can involve the state AND multiple local jurisdictions simultaneously. The Colorado DOR has become increasingly aggressive in auditing businesses for sales tax compliance, income tax nexus, and marijuana tax compliance.
Multi-State Income Tax Audits
If your business operates in multiple states, you may face audits from several state tax agencies simultaneously. States are increasingly sharing data and coordinating enforcement. Issues like improper income apportionment, missed filing obligations, and nexus disputes are common triggers. We coordinate defense across all states to help consistent positions and prevent one state's resolution from creating exposure in another.
State Residency Audits
High-income individuals who move between states, especially from high-tax to low-tax states, face aggressive residency audits. States like New York, California, and New Jersey have dedicated units that examine where you actually live, work, and maintain ties. These audits are deeply personal, examining everything from cell phone records and social media to doctor visits and pet grooming appointments.
State Audit Rules at a Glance
| State | Lookback Period | Statute of Limitations | Aggressive Areas |
|---|---|---|---|
| Colorado | 3 years (6 if 25%+ understatement) | 4 years from filing | Sales tax, home-rule cities, marijuana |
| California (FTB) | 4 years (8 for 25%+ omission) | 4 years from filing | Residency audits, high-income targeting |
| New York | 3 years (6 for 25%+ omission) | 3 years from filing | Residency, city tax, pass-through entities |
| Texas (Comptroller) | 4 years | 4 years from due date | Franchise tax, sales tax, nexus |
| Florida (DOR) | 3 years (5 for sales tax) | 3 years from filing | Sales tax, reemployment tax, residency |
| Illinois | 3 years (6 for 25%+) | 3 years from filing | Sales tax, income tax, use tax |
Representative examples. Rules vary by tax type and filing status.
Your Defense Team Is Ready
Our Enrolled Agents have handled hundreds of audits, from simple correspondence to multi-year field examinations. You'll have experienced professionals in your corner from day one.
"We treat every client like they're our only client."
Talk to Our Audit TeamSales & Use Tax Audit Defense
Taxability · Sampling Challenges · Exemption Certificates · Use Tax
Sales tax audits are among the most financially devastating audits a business can face. Unlike income tax audits where deductions offset findings, sales tax assessments are dollar-for-dollar liability, plus penalties and interest. States are aggressively auditing businesses post-Wayfair as they pursue untapped revenue from remote sellers, marketplace participants, and businesses with multi-state operations. We've represented businesses through hundreds of sales tax audits and routinely reduce assessed amounts by 40-80%.
Typical assessment reduction
Standard lookback period
Common assessment range for mid-size businesses
Typical protest deadline
Taxability Challenges
Auditors frequently reclassify your products or services as taxable when you've been treating them as exempt. This is the highest-dollar finding in most sales tax audits. We review every reclassification against the actual statute, administrative rules, and applicable exemptions, and push back when the auditor is wrong.
Sampling Methodology Defense
Most large sales tax audits use statistical sampling, the auditor reviews a subset of transactions and projects the error rate across the entire audit period. If the sample is biased, unrepresentative, or statistically flawed, the projected assessment can be wildly overstated. We challenge unfair sampling methodologies and negotiate for re-sampling or actual transaction review when the methodology produces unreasonable results.
Exemption Certificate Defense
Missing or invalid exemption certificates are the most common sales tax audit finding. Auditors request certificates for every exempt sale, and any gap means YOU owe the tax, even if the buyer was legitimately exempt. We help reconstruct missing certificates, validate existing ones, and negotiate with auditors when certificates have minor deficiencies.
Use Tax Exposure
Auditors pull your expense records and identify purchases where sales tax wasn't charged by the vendor, creating use tax liability. This includes equipment, software, office supplies, and services purchased from out-of-state vendors. Use tax findings often double or triple the total audit assessment. We review every identified purchase and challenge improper classifications.
What Happens After You Receive a Notice?
Time is critical when responding to tax notices. Here's what you need to know, and what we do to help.
Don't Ignore It
Every IRS and state notice has a deadline. Ignoring it can result in automatic assessments, penalties, and limited options.
Note the Deadline
Most notices give you 30-60 days to respond. Some are shorter. Time is your most valuable asset in audit defense.
Gather Your Records
Start collecting relevant documents, tax returns, receipts, bank statements, and any records related to the issue.
Get Professional Help
Before you respond, have a professional review the notice. What you say (or don't say) can significantly impact the outcome.
We Handle the Rest
Once engaged, we take over all communications, prepare your response, and represent you throughout the process.
⏰ The sooner we review your notice, the more options we have to protect you.
Our Audit Defense Process
From your first call to final resolution, here's how we protect you every step of the way.
Notice Review & Analysis
We review your notice, identify the issues, and explain exactly what the IRS or state is asking for, in plain English.
Representation Authorization
We file Power of Attorney (Form 2848) so we can legally represent you and communicate directly with tax authorities on your behalf.
Response Preparation
We gather documentation, prepare a strategic response, and address every required item is properly addressed and substantiated.
Negotiation & Resolution
If adjustments are proposed, we negotiate on your behalf to minimize assessments, abate penalties, and reach the best possible outcome.
Case Closure & Prevention
Once resolved, we maintain proper documentation, advise on compliance improvements, and help prevent future audit triggers.
Every audit is different, we tailor our approach based on your specific situation and the type of examination.
Worried About What Comes Next?
Most audit cases resolve better than clients expect. Let us review your situation, completely free, and walk you through your options.
Your Rights & Representation
Taxpayer Bill of Rights · Who Can Represent You · Appeals Process
The IRS Taxpayer Bill of Rights establishes 10 fundamental rights that every taxpayer has when dealing with the IRS. Understanding these rights, and having a representative who enforces them, is critical to a successful audit outcome. Many taxpayers unknowingly waive rights or accept unfavorable outcomes because they don't know what protections they have.
The IRS Taxpayer Bill of Rights
The Right to Be Informed
You have the right to know what you need to do to comply with tax laws. You are entitled to clear explanations of the law and IRS procedures, and to receive clear communications from the IRS about any decisions regarding your account.
The Right to Quality Service
You have the right to receive prompt, courteous, and professional assistance in your dealings with the IRS. You are entitled to be spoken to in a way you can understand, and to receive timely responses to your inquiries.
The Right to Pay No More Than the Correct Amount of Tax
You have the right to pay only the amount of tax legally due, including interest and penalties, and to have the IRS apply all tax payments properly.
The Right to Challenge the IRS's Position and Be Heard
You have the right to raise objections and provide additional documentation in response to formal IRS actions or proposed actions. The IRS must consider your timely objections and documentation before taking action against you.
The Right to Appeal an IRS Decision in an Independent Forum
You have the right to a fair and impartial administrative appeal of most IRS decisions, including many penalties. You have the right to receive a written response regarding the Office of Appeals' decision.
The Right to Finality
You have the right to know the maximum amount of time you have to challenge the IRS's position, as well as the maximum amount of time the IRS has to audit a particular tax year or collect a tax debt.
The Right to Privacy
You have the right to expect that any IRS inquiry, examination, or enforcement action will comply with the law. The IRS cannot use intrusive investigation methods when less intrusive alternatives are available.
The Right to Confidentiality
You have the right to expect that any information you provide to the IRS will not be disclosed unless authorized by you or by law. You have the right to know about and to consent to the use of your tax information for purposes other than tax.
The Right to Retain Representation
You have the right to retain an authorized representative of your choice to represent you in dealings with the IRS. If you cannot afford representation, you may be eligible for assistance from a Low Income Taxpayer Clinic.
The Right to a Fair and Just Tax System
You have the right to expect the tax system to consider facts and circumstances that might affect your underlying liabilities, ability to pay, or ability to provide information timely.
Who Can Represent You Before the IRS?
Not everyone who prepares your tax return can represent you during an audit. Representation rights depend on the type of practitioner and their qualifications. Here's who can speak to the IRS on your behalf, and the scope of their authority.
Enrolled Agents (EAs)
Unlimited, all tax matters, all IRS levelsFederally authorized tax practitioners with unlimited representation rights before the IRS. Enrolled Agents have passed a comprehensive three-part exam covering individual and business taxation, or have extensive prior IRS experience. EAs can represent any taxpayer on any tax matter at any IRS level, including audits, collections, and appeals.
Accounting & Tax Professionals
Unlimited, all tax matters, all IRS levelsState-authorized accounting professionals with IRS representation rights similar to EAs. These professionals may or may not specialize in taxation, some focus on auditing, advisory, or financial planning. When choosing a professional for audit defense, look for specific tax controversy experience.
Tax Attorneys
Unlimited, plus litigation and attorney-client privilegeLawyers who specialize in tax law with unlimited IRS representation rights. Tax attorneys are particularly valuable for cases involving potential fraud, criminal investigation, Tax Court litigation, or complex legal questions. Attorney-client privilege provides additional protection for communications.
Annual Filing Season Program Participants
Limited, only returns they prepared, examination level onlyTax preparers with limited representation rights. They can only represent clients whose returns they personally prepared, and only during examinations and customer service interactions. They CANNOT represent you at appeals, collections, or other IRS proceedings.
The Appeals Process
If you disagree with audit findings, you have the right to appeal. The IRS Office of Appeals is independent from the examination division and has authority to settle cases. Many of our best outcomes come at the appeals level.
30-Day Letter Response
After the audit, the IRS sends proposed changes. You have 30 days to agree or file a formal written protest. We prepare comprehensive protests that frame the legal and factual arguments most favorably for your case.
IRS Office of Appeals
Appeals Officers are independent from the examination division. They have settlement authority and are trained to resolve cases based on the 'hazards of litigation', meaning they assess how likely the IRS would win in court and settle accordingly. Many cases are resolved more favorably at Appeals than during the audit.
Fast Track Settlement
For certain cases, the IRS offers Fast Track Settlement, a mediation program where an Appeals Officer mediates between you and the examiner while the case is still in the examination division. This can resolve disputes in as little as 60 days.
U.S. Tax Court
If Appeals doesn't resolve the issue, you can petition the U.S. Tax Court within 90 days of the Statutory Notice of Deficiency. Tax Court allows you to challenge the IRS's assessment without paying first. We coordinate with tax litigation counsel when cases reach this stage.
Our Team Includes Enrolled Agents
Our audit defense team is led by Enrolled Agents with unlimited IRS representation authority. We file Power of Attorney (Form 2848) so we can communicate directly with the IRS, you never have to speak to an auditor or attend an examination. We handle everything from initial response through final resolution or appeal.
Real Cases. Real Results.
Representative outcomes from our audit defense practice
Every audit is different, but the pattern is consistent: a well-prepared defense with experienced representation achieves dramatically better outcomes than going it alone. These examples represent real case types and outcomes from our practice. Identifying details have been changed to protect client confidentiality.
E-Commerce Business, Multi-State Sales Tax Audit
The Situation:
An online retailer selling through Shopify and Amazon received audit notices from three states simultaneously for sales tax non-compliance. The combined proposed assessment was $287,000 in back taxes, penalties, and interest covering a 4-year period. The client had been unaware of economic nexus obligations post-Wayfair and had never registered in these states.
What We Did:
Outcome:
Total liability was significantly reduced through strategic negotiation. Client is now fully compliant in all states with ongoing filing managed by our team.
Small Business Owner, IRS Field Audit
The Situation:
A consulting firm owner with $800K in revenue received notice of an IRS field audit covering two tax years. The IRS questioned business deductions, vehicle expenses, home office claims, and S-Corp reasonable compensation. The owner had been handling their own bookkeeping with significant gaps in documentation.
What We Did:
Outcome:
The vast majority of proposed adjustments were successfully challenged and reversed. Penalties were fully abated based on reasonable cause.
Real Estate Investor, State Residency Audit
The Situation:
A high-income investor who relocated from California to Colorado faced a California FTB residency audit claiming they owed