Audit Alarm FAQs
General Questions
Will having an Audit Alarm Membership cause me to be more likely to be audited?
Absolutely not! By becoming an Audit Alarm member at any level, you sign an IRS Form 8821. If the IRS targets you for an audit, we will represent you by increasing our level of Power of Attorney to a Form 2848 "Declaration of Representative." Targeting you for an audit due to being represented would be an abuse of your rights as a taxpayer to representation under tax code section 7803. The IRS Commissioner requires all employees of the IRS to respect Section 7803; therefore, it does not increase your chance of being audited.
Is Audit Alarm an offer of insurance?
Audit Alarm is a membership service but is not an insurance policy. Each taxpayer with a membership remains fully liable to the IRS and any taxing authorities for all taxes owed, penalties and interest assessed. We offer tax audit and tax problem representation services to our members as part of the Audit Alarm membership.
Can Audit Alarm cover my business?
Yes, the Enterprise Assurance Program was designed for business owners who want to separately protect their business(es). A company can become an Audit Alarm Member if the business files a separate entity tax return (Form 1120, 1120-S, 1065, 1041, etc. A Form 1040, Schedule C business is covered under the individual plans (Select Assurance or Executive Assurance)).
Can I still use my accountant?
Yes, you can still use your accountant, bookkeeper, CPA, or E.A. for accounting, bookkeeping, or tax preparation. While we do offer these services and offer discounts under the Executive Assurance Program for their use, there is no requirement to use those services to be a member of Audit Alarm.
I already hired a tax professional to prepare my tax returns; why do I need IRS Prevention?
This is one of the reasons why you need tax monitoring. Our tax professionals will review your IRS tax transcripts, notices, and correspondence and alert you if a critical mistake or red flag may cause you to overpay your taxes or miss out on credits and refunds. This is included in our monthly monitoring service.
Won't my tax preparer's audit protection cover me?
Accountants and tax preparers typically offer protection in one of two ways. Either by reselling third-party protection (usually less than $100 per year), some offer their own protection services (usually somewhere between $150-$400 per year).
Of the three major audit protection providers, if you look closely at their terms and conditions, you will be able to see the flaws.
- The largest provider is Tax Protection Plus. TaxACT and many tax preparers offer Tax Protection Plus through the software they use for tax preparation. While this service does provide tax audit protection with certain limitations, it does not offer Tax Account Monitoring or Tax-Related Identity Theft Protection.
- The second largest provider is TurboTax's TaxAudit. which only protects against errors in TurboTax's calculations, and it does not offer Tax Account Monitoring or Tax-Related Identity Theft Protection.
- H&R Block protection is called the "Peace of Mind Guarantee."If you read the guarantee's terms, I think your will agree their own peace of mind is protected, not yours.
When the tax preparer offers their own audit protection, a close examination of the terms will typically show that the service hours are often limited. Usually, no more than 10 hours of effort is allowed under their plan.
If I'm married, will Audit Alarm provide both of us with alerts, written reports, and tax recommendations?
If the filing status for your tax returns is married filing jointly, our Tax Account Monitoring program will cover both of you with alerts, written reports, and tax recommendations. If your filing status is married filing separately, both spouses will need to enroll.
How soon will you start to monitor my IRS tax transcripts and account and look for mistakes and ways for me to save money?
As soon as you enroll and are accepted into our Tax Account Monitoring Program, we will start the IRS account monitoring process and alert you when we find essential information on your tax transcripts, accounts, and records that can save you money or items that we believe are of concern and could cost you money.
When will I receive my first written report from my tax professional about my IRS tax transcript?
You will receive your first written report (2 – 3 pages long) within 21 – 60 days of enrolling. The tax professional's report will contain recommendations and action items that will fix whatever tax problem you may be experiencing. The number of alerts you receive during any given month or throughout the year will vary and is 100% dependent on the activity taken on your IRS tax account.
What qualifies as an audit?
The IRS uses the terms "examination or inquiry" to make it more palatable. They do not like to use the word "audit." They call their auditors "Tax Examiners" or "Revenue Agents." At Audit Alarm, we consider all examinations and inquiries to be an audit and believe they should be taken seriously.
Some audits are initiated by collection personnel known as "Revenue Officers." They can make a referral to the audit unit any time they suspect discrepancies in a return or returns.
The IRS' Underreporting Unit drives many audits by issuing CP2000 (Proposed Changes to Your Return) or CP2501 (Tax Information Does Not match) letters.
If the IRS is asking about your income or expenses for a particular year, we take it seriously, as you should, and we consider that a form of audit. That's what you should expect from your membership.
Why is the success rate of the IRS and Taxing Authorities so high against unprotected taxpayers?
The total cost of comprehensive audit representation throughout all stages of the audit process is too much for all but the wealthiest taxpayers. The IRS knows this, often drags out an audit, and requests time extensions to the statute of limitations. These tactics and delays continually heighten the taxpayer's anxiety, causing them to become panicky and willing to concede to the auditor's endless demands.
Our representatives are not bothered by the delay tactics and will not approve an extension waiver unless it is in the taxpayer's best interest. We take all the gamesmanship off the table and put the advantage back on your side. We focus on achieving the best outcome possible rather than how long it takes. While we do not want the audit to take any longer than necessary, sometimes, we will reverse these tactics to give an advantage to our client.
Do I have to pay a hefty upfront fee once for a tax professional to review my tax transcripts and accounts?
No. Instead of paying a tax lawyer, certified public accountant, or other tax professional an hourly fee or all up front, you only have to pay a small monthly fee. You will have a team of tax experts on your side to receive and analyze your IRS notices and correspondence and monitor them in real-time for things that may require you to take action and resolve. It's like having your very own personal IRS watchdog.
Can my Audit Alarm membership actually prevent adverse collection action taken against me by the IRS?
We cannot prevent the IRS from taking adverse action against you. However, after monitoring your IRS tax transcripts, our tax professionals will inform you in writing if the IRS is targeting you for significant adverse collection action against you (wage garnishment, bank levy, tax lien). Once you have written recommendations on how to solve the IRS issue or problem, you can choose to be proactive and hire your tax professional to contact the IRS and resolve the collection activity against you. As a member of Audit Alarm, your representation for audits and tax problems is included for any year(s) that you choose to cover. If you are an Executive Member, you will receive discounts for any future professional services that you may need, such as tax preparation, accounting, payroll, tax planning, and entity structuring/preparation.
If I end up owing money to the IRS or need professional help with a tax audit, can I hire my tax professional to represent me and take care of it?
Yes, if you owe money to the IRS for any reason or are about to go through an IRS tax audit or examination, your tax audit or tax problem representation would be included in your membership for any year you have chosen to cover. The IRS has numerous outstanding tax relief programs available. Our tax professionals can help you get accepted into a tax relief program, and if you qualify, settle your entire tax debt for less money than what you owe.
If I sign up for Audit Alarm, will you contact the IRS when you receive a notice, correspondence, or alert about my IRS account or transcript?
When we receive an important notice, correspondence, or alert about your IRS tax transcript and account, we will notify you (not the IRS) about what we received from the IRS. We will provide you with written recommendations for the corrective action you need to take. As a member of Audit Alarm, your representation for audits and tax problems is included for any year(s) that you choose to cover
How long does an audit take?
The primary audit process usually takes 12 - 18 months. If you challenge the auditor's decision (common in audits), it can take another 2- 3 additional months. If you contest the audit supervisor's decision, you must petition U.S. Tax Court (not uncommon). It may take another six months to a year to get a hearing.
If you hire a tax attorney to represent you, they will typically charge by the hour. They will usually quote you an extensive range of fees (Audit + appeal + tax court).
Our Audit Alarm membership is predictable. It is considerably less than an experienced tax attorney's hourly rate. Not surprising. It is very affordable protection.
How can we offer Audit and Notice protection for such a low price?
Our membership represents a mutual protection method standard like that used in the insurance industry. We are not offering insurance, as was explained in a previous FAQ. We lose money on all audits and tax resolution cases if we only look at the member's payments compared to the hours spent on the case. Because all members contribute and not all members have issues, we remain profitable. We focus on consistently winning against the IRS and State Taxing Authorities. Legacy Tax & Resolution Services has been successfully defending taxpayers since 1998. You can see the client success stories of our many clients under Client Success Stories or check out our testimonials page or Google Review on our Google My Business locations. If you look at our track record and read the reviews from satisfied clients, you will see proof that our system is working.
Are you certified or qualified?
Stephan H. Brewer heads our Audit Alarm representation practice. He has significant experience and training in representing taxpayers before the IRS. He has a law degree in International and U.S. Tax Law. He has been admitted to representation before the IRS. He has earned the designation of Certified Tax Resolution Specialist (CTRS) by the American Society of Tax Problem Solvers. He is a Fellow of the National Tax Practice Institute. He is also a member of the National Association of Enrolled Agents and the National Association of Tax Preparers.
What year is covered by my membership for audit and tax notice protection?
When you enroll as a member of Audit Alarm, the current year's return is covered for audit and tax notice protection as part of the plan.
Can I purchase additional Audit and Tax Notice Defense for prior years?
Yes. You can purchase Audit Defense and Tax Notice Protection for all prior years that may be subject to audit. For federal income tax audits, the audit statute is typically three years and up to six years if you substantially underreported your income. Most states add another year. Some State taxing agencies have varying audit expiration periods. With an ongoing membership, the year(s) covered continue to roll. For example, if you add the additional three years, you would be consistently protected for the current year plus the three subsequent years, typically included in the audit statute. If you are concerned about the additional state statute year, you would add the fourth year out.
Note: If your only sign up for Audit Alarm without adding the additional years open to audit statute, you would be covered for the prior rolling year subject to audit only.
How long will these Membership Plans defend my return?
With the Audit Defense portion of the Audit Alarm Membership, we will defend the tax return for which you purchased the membership for the remainder of the audit statute.
Am I obligated to hire your tax professional if something needs to be done on my taxes, for a year outside of the Audit Alarm Membership?
You are not obligated to use our tax professionals or team, and your IRS monitoring services will not be affected. Even if you have not chosen to cover a particular year for audit and tax problem representation, once you compare fees, you will likely pay our tax professionals significantly less money than you will pay other tax professionals with comparable experience. If you have a tax problem that needs to be addressed, the initial consultation is free, so there is no risk to you speaking with a tax professional about your specific tax matter.
Will Audit Alarm continue to offer memberships every year?
Yes, Audit Alarm/LTRS plans to continue our membership program.
General Questions
How long have you been in business?
We have been providing Tax Resolution and advisory services since 1998.
What forms of payment do you accept?
Audit Alarm/LTRS accepts American Express, MasterCard, Visa, and Discover credit cards. We also accept checks and money orders.
Will you keep my tax information private?
At Audit Alarm/LTRS, we take your privacy seriously and work to ensure that your personal data is secure. We never sell your data to any third parties. Access to your information is protected from outside sources and restricted to only those internal employees and systems necessary to the execution of your case. When you connect to our Message Access Portal (MAP), your information is always encrypted during your connection. Also, your data is encrypted when transmitted on our internal network and stored on our servers.
As your representative before the IRS or state taxing agency, we are bound by the rules set forth by those agencies regarding how we use your data. While we maintain the personal data of your case, we restrict the types of information that we deliver via our website to just that which is necessary for you to manage your account, purchase one of our products, or provide our services to you. We also adhere to the data privacy laws of California, which are among the strictest in the U.S.
You can find more information about how we protect and use your data in our privacy policy.
Where are you located?
Our corporate office is located in Phoenix, Arizona. However, we have other locations and qualified representatives throughout the United States.
Membership Questions
What happens when I receive an audit or collection notice?
Call the phone number provided on your Audit Alarm/LTRS membership agreement as soon as possible. Do not contact the IRS unless otherwise instructed by your audit defense team. Once you have contacted us, we will provide instructions on moving forward with your case.
What is your satisfaction guarantee?
You may cancel your membership for any reason within 30 days of purchase.
Will you review my tax return before you accept my membership?
No, we do not review your tax return before accepting the membership.
I have a business. Is it included?
If you have a business that files an entity return (Partnership, Corporation, Estate or trust, Exempt Organization, or Pension), you must purchase a separate Enterprise Assurance Membership for your entity.
If your business entity has gross receipts exceeding $5 million and/or ten partners/stockholders/beneficiaries/members, the business is not eligible for membership.
Do you provide membership opportunities to Publicly Traded companies?
We do not provide any form of membership for Publicly Traded companies.
Can I still obtain a membership if I did not file my return on time?
The Audit Protection portion our your Audit Alarm Membership includes tax returns filed late as long as they were filed. We cannot defend "Substitute For Returns." A Substitute for Returns is when the IRS and State Taxing Authority prepare a return for you because you did not file one. It is not a real return and tends to be highly inflated. It is merely a method to assess and collect taxes. While an original return may be filed to reduce a tax debt, it would not be covered under your membership.
What if I filed an extension? Can I obtain a membership?
Yes, returns that were extended, for which you purchased a membership, are included.
Is my amended return eligible for membership?
Yes, amended returns for which you purchased a membership are included.
What if I have multiple state returns?
All related state returns are included.
For what tax return type can I purchase a membership?
Audit Alarm/LTRS offers memberships for the following tax return types:
Individual – Form 1040 (Select and Executive Assurance)
Corporation – Form 1120 (Enterprise Assurance Only)
S–Corporation – Form 1120S (Enterprise Assurance Only)
Partnership – Form 1065 (Enterprise Assurance Only)
Fiduciary – Form 1041 (Enterprise Assurance Only)
Does my spouse need to be named when I enroll?
No. If you are selected for an audit or tax notice and filed a joint return for that tax year, both you and your spouse will receive the Audit or notice protection.
Audit or Collection Notice Questions
How do I know if my notice is serious?
Any notice or letter from the IRS or State Tax Authorities is potentially serious. However, not every notice is an audit or requires a response. Check out our Tax Notices and Letters to determine the nature of what you received. Always send us a message through our portal and upload a copy of any notice or letter. If you are an Audit Alarm/LTRS member, you can report your notice or letter by calling 866-5-Audit Alarm (866-528-3482).
I spoke to an IRS or State Agent about my notice or letter. Is it too late to still call you?
No. Often, help is still possible. However, we will need to see all notices and tax returns to evaluate the case.
How fast can I expect an answer from Customer Service?
Customer Service typically tries to return your call by the end of the next business day.
I checked my refund status with the IRS or state, and it says I will receive a notice or audit letter. I still have not received it yet; when should I call Audit Alarm/LTRS for help?
You will need to wait until you receive a physical copy of the notice from the IRS or the state. Once you have the notice, contact us immediately so we can assist you. Keep in mind: the IRS will mail the notice or audit letter to the last known address you used when filing your income tax return. You should consider filing IRS Form 8822, Change of Address, if your address has changed.
Should I just respond to the notice since the IRS or State agency only requests a few documents?
Even if the letter seems to be asking for something simple, you could damage your case without realizing it. In the event of receiving any income tax notice, we ask that members please get in touch with us first so that we can advise them on their next steps.
Should I reply to the notice informing the agency that Audit Alarm will represent me?
No. We ask that you allow us to handle all communications with the IRS or State Taxing Authorities on your behalf. Once your representative has been assigned to the case, they will be able to provide you with any necessary documents or instructions about the best way to inform the agency that you have representation.
See
Audit Alarm Service Terms & Conditions
Audit Alarm Cancellation, Return, and Refund Policy
Audit Alarm Legal Information and Resources
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