Questions About Audit Support and Representation

Most taxpayers will never be audited, but some receive notices or requests for information. Knowing in advance how your advisor handles these situations reduces stress. This guide lists questions about audit support and representation, and what good answers look like.

What Is Included?

Ask whether responses to notices and examination support are included in the base fee, offered as an optional add-on, or billed separately. Some firms include help with simple notices and charge for full examinations. Others offer an audit protection plan. Ask for the terms in writing, including what is covered, what is excluded, and how fees are calculated.

Who Can Represent Me?

Ask whether the person who would represent you is authorized to represent taxpayers before the IRS and state agencies. Certified public accountants, enrolled agents, and attorneys have unlimited representation rights before the IRS. Other preparers may have limited rights. Ask what the professional's authority covers. See CPA, Enrolled Agent, or Tax Attorney: What Is the Difference?.

Will You Represent Me for Returns You Did Not Prepare?

Some firms represent clients only for returns they prepared. If you are hiring a firm to review or plan, ask whether representation covers returns prepared by others. If you have a past return that may be reviewed, ask about it before you hire.

How Are Notices Handled?

Ask what you should do when you receive a notice, and how the firm wants to hear about it. Ask how quickly the firm reviews notices, and how you will be informed of deadlines. A good answer explains that you should send the notice promptly and that the firm will review the response deadline and advise on next steps.

What About Strategies You Recommended?

If the firm recommended a strategy that is later questioned, ask what support the firm provides. Does the firm document its reasoning, and will it help defend the position? Will it charge for that help? A responsible firm documents its recommendations, and it can explain its role in defending them. See Questions About Strategy Risk and Documentation.

What Is Your Approach During an Examination?

Ask how the firm typically manages examinations: does it communicate with the examiner on your behalf, prepare a response, and attend meetings? Ask how you should communicate with the examiner. Many practitioners recommend that clients avoid speaking directly with examiners without their representative. A good answer describes a structured process.

Do You Charge a Different Rate for Representation?

Ask whether representation is billed at a different rate or as a flat fee. Ask whether a retainer is required. Confirm whether you will be informed of estimated costs as the matter develops.

What Are the Risks of Representation?

Ask what the firm's obligations are if it discovers an error during an examination. Professionals are bound by ethical rules, and they cannot ignore known errors. A good answer explains the obligations in general terms and shows respect for the rules.

Do You Carry Professional Liability Insurance?

Many professionals carry insurance for errors and omissions. Asking is reasonable. The answer does not guarantee outcomes, but it shows that the firm has considered the risk of mistakes.

How Do You Keep Records for an Examination?

Ask how long the firm retains workpapers and how they can be provided to you. If your return is examined years later, the firm's file can be important. See How to Document the Advice You Receive.

How to Prepare Yourself

Regardless of your advisor, keep your own records organized. Save copies of returns, supporting documents, and correspondence. Respond to notices promptly, and avoid ignoring deadlines. If you receive a notice, contact your advisor before responding, unless you are certain how to handle it.

Where AE Tax Advisors Fits

You can ask the questions above during a discovery call to learn how AE Tax Advisors handles notices and examinations, and what is included in an engagement.

An Example of What to Clarify in Writing

Suppose a firm's proposal says that audit support is included. Ask what that means. It might mean help drafting a response to a routine notice, but not attendance at an examination meeting. It might cover returns prepared by the firm in the last three years, but not earlier ones. It might cover the time of a junior staff member, but not a senior professional. Each of these limits is reasonable, but you want to know them ahead of time. Ask for the definition in the engagement letter, and ask for a rough example of the fees that would apply if a matter goes beyond the included support.

Keep Your Own File

Even when your advisor keeps a complete file, keep copies of your returns, the supporting schedules, and any advice you receive in writing. If your relationship with the advisor ends, you will have what you need.

Timing Matters

Ask how quickly the firm expects to respond once you send a notice. Notices carry deadlines, and a delay of even a few days can shorten your options. A firm with a clear intake process for notices, such as a dedicated email address or a standard form, is usually better prepared to act quickly.

Educational purposes only. This page is general education and is not tax, legal, or accounting advice. Descriptions of how AE Tax Advisors approaches engagements are general, and the scope, timing, and fees for any engagement are confirmed with you directly. Tax laws change and outcomes depend on individual facts. No result is guaranteed.