There are times that due to circumstances beyond our control we are faced with a Colorado IRS Audit. If and when that happens, you must no longer feel that you are on your own. Help is available from professionals who are experts in this type of situation. Referred to as "IRS Tax Negotiators", these individuals are familiar with the ins and outs of the Internal Revenue Service and are there to help you.

According to www.legal-dictionary.thefreedictionary.com, an audit is "A systematic examination of financial or accounting records by a specialized inspector, called an auditor, to verify their accuracy and truthfulness; A hearing during which financial data are investigated for purposes of authentication." Another name for an audit is the "examination of a tax payer's return". (www.legal-dictionary.thefreedictionary.com)

A Colorado IRS Audit is simply an audit conducted by IRS agents in the State of Colorado.

There are two types of Colorado IRS Audits. The first is through the mail followed up by an interview at the local IRS offices. This type of audit is the most common. The second type of Colorado IRS Audit involves the IRS agents coming into your home or place of business. Small business owners are the ones which are generally more exposed to this latter type of audit.

The Internal Revenue System has to right to investigate and conduct an audit on anyone they chose to regardless of whether that individual is behind on his/her taxes, or not. Other factors which may "trigger" an audit are:

• "Tagged by IRS Computer Analysis - just like the credit scoring system we all know as FICO, the IRS has its own unique model for ranking taxpayer risk and analyzing which returns require further inquiry. A substantial 80% of all audits are initiated this way.
• Random IRS Selection - lucky you, it's a case of wrong place, wrong time. A small percentage of returns are selected this way.
• Expenses vs. Income are Disproportionate - when the expenses you have claimed on your return appear too high relative to your income.
• Designated Fields or Professions - there are particular professions which are deemed to be at a higher risk of malfeasance by the IRS and are therefore more likely to be subject to an audit.
• A Habitual Problem Child - you are a taxpayer who has had previous problems with the IRS and may have been audited before and perhaps even lost a prior tax dispute with the IRS." (www.erate.com)

Should you find yourself in one of the precarious situations mentioned, above, after the IRS is finished with your audit you are provided with three choices - and, three choices, only! They are:

• "Pay the IRS 100% of what they think you owe today.
• Set up a monthly payment which never goes away due to the additional penalties and interest that continue to add up.
• Reduce the total amount you owe to an affordable number and get on with the rest of your life!" (www.irsnegotiators.com)

There is a solution when faced with a Colorado IRS Audit. It is called "IRS Tax Negotiator". Who are these individuals? "the Taxpayer Bill of Rights 2, Pub. L. No. 104-168, 110 Stat. 1452, established and delegated authority to the Office of Taxpayer Advocate. This office is responsible for assisting taxpayers in resolving problems with the IRS, identifying areas where taxpayers have had problems with the service, and identifying potential legislative and regulatory changes that could mitigate problems between the IRS and taxpayers." (www.legal-dictionary.thefreedictionary.com) Your other option is a "privately hired gun".

IRS tax negotiators "have easy ways to complete old tax returns..(they) realize that many taxpayers have lost old records or just can't find them! (and they) can help you file old tax returns without any records." (www.irsnegotiators.com)

If you have decided that you are familiar with your tax situation, have all of your documentation and wish to handle a Colorado IRS Audit yourself, keep these tips in mind:

1. "Let the IRS Inquiry Guide Your Behavior: Do not offer more information than what is being asked for, focus only on the sections of the return which are being questioned. And do not bring more information or documentation with you than that which has been requested. If in fact the IRS auditor inquires about items of the return not originally outlined in your audit notice, respectfully let them know you were not prepared to review or discuss those items and should schedule an additional meeting.
2. Check your attitude at the door. No one likes the IRS but having a hostile or combative attitude towards the audit or the auditor will only work against you. It is obvious to say and difficult to put into practice but you will end up being your own worst enemy if you become argumentative with the auditor. Maintain your composure and keep your cool. Think of the worst thing that could happen during the course of the audit and measure your reaction ahead of time. When you find yourself disagreeing with the auditor state your position as professionally and precisely as possible only once and then let it go. If you are being represented, your tax professional should know how to correctly respond to any issues in dispute. Keep in mind you do have additional recourse by taking your case to the next level above your auditor and if need be on to tax court if you feel the auditor's and IRS's decision is incorrect.
3. Remember that your auditor is only human and a taxpayer too. Be respectful, organized, and informed at the appointment. You don't need to be friendly but there is no reason to be rude or contemptuous either, the auditor is only doing their job and it is not a pleasant one. Being an auditor is a highly stressful position and not a very popular one either. The experience level of an auditor could be such that they are fresh out of school and know only slightly more about the technicalities of the tax code than you do. If in fact you have hired representation, your tax professional will likely be the one in the room that is most knowledgeable in areas involving the tax code. Therefore there's no reason to allow the whole process to overwhelm you." (www.erate.com)