The prospect of an IRS audit can cause even the most
level-headed attorney to panic. Take a deep breath. The IRS's
Audit Technique Guide (ATG) covering attorneys may ease
your mind, or at least provide insight into the process.
Auditor Hot Spots
Although the ATG is designed for IRS employees, knowing what
auditors look for enables lawyers and law firms to provide the
right information and documents and reduce the time and stress of
being audited. The ATG highlights several areas of auditor
interest, including:
- Unreported Income.
Auditors are told how to ferret out unreported income by, for
example, determining whether fees withdrawn from client trust
accounts were included in income at the proper time. Special
attention is given to checks from those accounts that are either
cashed or deposited into accounts other than the firm's general
operating account.
