You Have More at Stake. We Understand That.
High-income individuals and their businesses are examined at higher rates, and their returns often involve partnerships, closely held companies, trusts and foreign holdings. We represent them in IRS and California examinations, appeals and litigation, with the discretion these matters require.
What the IRS Data Show
According to the IRS Data Book for fiscal year 2025, examination coverage for tax year 2021 returns was 6.6 percent for returns reporting total positive income of $10 million or more, 3.9 percent for $5 million to $10 million, and 0.9 percent for $1 million to $5 million. The IRS closed 497,621 tax return audits in fiscal year 2025.
Matters We Handle
Complex examinations
Field examinations of individuals with significant business, partnership and investment income, including multi-year examinations.
Pass-through entities
Partnership examinations under the centralized audit regime, and S corporation compensation and basis issues.
Listed and reportable transactions
Final regulations issued in 2024 and 2025 identify certain syndicated conservation easement and micro-captive insurance transactions as listed transactions or transactions of interest, with disclosure requirements for participants and material advisors.
Foreign accounts and assets
FBAR and Form 8938 reporting, and the options for correcting past years.
California residency
Residency examinations of individuals who have left California or spend part of the year elsewhere.
Charitable organizations
Formation and annual compliance for private charities and other nonprofit organizations.
Discretion
We do not publicize client matters. Confidential communications made to obtain legal advice are protected by the attorney-client privilege, and materials prepared in anticipation of litigation may be protected as work product. Neither protection covers information that must be reported on a return.
Before an Examination Begins
Many issues are best addressed before the IRS asks: documenting significant positions, considering disclosure on Form 8275 where appropriate, and correcting errors through amended returns. Disclosure does not prevent an examination, but it can affect which penalties apply.
Confidential Counsel for Complex Matters
Contact Advantage Tax Law for a confidential consultation.