Audit Representation

Cash Business Audit Resolved Without Reconstruction Penalty

$29,000 adjustment cut

Illustrative outcome

This is an illustrative example of our work in audit representation. Below is the situation, how an IRS Enrolled Agent approaches it, the outcome those tools can produce, and what it means for anyone facing something similar.

Focus area

Audit Representation

Result

$29,000 adjustment cut

Client

Food truck operator

The client & the challenge

The IRS proposed an indirect-method income reconstruction on a cash-heavy business.

Our approach

Produced point-of-sale data and bank reconciliations rebutting the estimate.

How we build the resolution

1
Take over communication
Under Power of Attorney (Form 2848), our Enrolled Agent handles every IRS conversation so you do not have to speak with the examiner.
2
Organize the substantiation
We assemble receipts, logs, and records for each item questioned, reconstructing them where originals are missing and the rules allow.
3
Respond and defend
We present the documentation, answer the examiner's questions precisely, and keep the audit scoped to what was actually raised.
4
Escalate if needed
If the examiner proposes an unfair adjustment, we protest and argue the issue at Appeals rather than accept it.

The outcome

The proposed increase was largely withdrawn.

$29,000 adjustment cutin this example

How audit representation works

In an audit, an Enrolled Agent can respond and appear on your behalf. Good documentation and a clear business purpose are what carry the day.

Facts worth knowing

Correspondence, office, and field audits differ in scope and stakes.
Substantiation — receipts, logs, and records — supports each item questioned.
Records can often be reconstructed when originals are missing.
An examiner's proposal can be challenged at Appeals.

Frequently asked questions

Do I have to talk to the IRS?

No. Under Power of Attorney, our Enrolled Agent handles every conversation with the examiner on your behalf.

What if I lost my receipts?

Records can often be reconstructed from bank and card statements, calendars, and other sources, which the rules allow for many deductions.

What if the examiner is wrong?

We do not have to accept a proposed adjustment. A protest takes the issue to IRS Appeals, an independent review.

Key takeaways

Outcome in this example: $29,000 adjustment cut.
Service applied: Audit Representation.
Handled by a federally licensed IRS Enrolled Agent, start to finish.
Available to individuals and businesses nationwide.
The sooner you act, the more options remain — penalties and interest keep accruing.

Facing something similar?

Get a free, no-pressure consultation with a licensed IRS Enrolled Agent who can tell you exactly where you stand.

Book a Free Consultation (562) 925-7100

This case study is an illustrative example of the types of matters we handle and the tools we use. It is a composite created for explanation and does not describe a specific client, and any figures shown are examples rather than actual client outcomes. Every case is different: your result depends on your own facts and on IRS determinations, and no particular outcome is promised.

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