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Understanding what might prompt an IRS audit can help you take steps to avoid one. In New Jersey, certain factors are more likely to draw the attention of tax authorities.
Unreported Income
Excessive Deductions
Claiming deductions that are unusually high relative to your income can prompt scrutiny. This includes large charitable donations, significant business expenses, or substantial deductions for a home office.
Self-Employment and Cash Businesses
Self-employed individuals and those operating cash-intensive businesses, such as restaurants or salons, are often audited due to the potential for underreporting income.
Home Office Deductions
High Income
Cryptocurrency Transactions
Multiple Years of Business Losses
Reporting losses year after year, especially on Schedule C, can make the IRS question whether your activity is a legitimate business or a hobby.
Partners
Local Insight – What NJ Residents Need to Know
Being audited in New Jersey presents its own set of challenges. State tax rules can differ from federal guidelines, and the NJ Division of Taxation often takes a more aggressive approach to collection and enforcement. That’s why working with a local firm that handles audits from the IRS and the State of New Jersey is essential.
- New Jersey may audit your return even if the IRS does not.
- The state has strict rules around residency, especially if you split time between multiple states.
- NJ audits often involve sales tax, payroll taxes, and business registration compliance—not just income tax.
- The state can impose penalties and interest and even suspend your driver’s license if taxes are unpaid.
- Being audited for claiming out-of-state residency while maintaining a NJ home, job, or voter registration.
- Retailers or restaurants are audited for underreporting sales or failing to collect enough sales tax.
- Professionals, such as consultants or freelancers, are flagged for uncollected or unpaid business taxes.
- Landlords or real estate investors questioned over passive losses or rent reporting.
At GTA Accounting Group, we’ve helped clients in cities like Newark, Jersey City, Paterson, and Trenton navigate state and federal audits. Our local presence means we’re familiar with the processes, timelines, and tendencies of local tax agents—so we can act quickly and decisively on your behalf.
If you're facing questions from the NJ Division of Taxation, we’re here to help defend your case, clarify your records, and pursue a fair outcome.
Why Choose GTA Accounting Group for IRS Audit Help in NJ
Having the right team can make a significant difference when you're under audit. At GTA Accounting Group, we’ve helped individuals and businesses across New Jersey respond confidently to IRS and state audit inquiries. Our focus is not just on resolving the issue but on doing it correctly, with clarity, professionalism, and complete protection of your rights.
Reasons Clients Across New Jersey Trust Us:
- Experienced audit specialists familiar with both federal and New Jersey tax law
- Clear communication—so you understand your options at every step.
- Direct handling of IRS and NJ Division of Taxation correspondence
- Detailed record review to identify the best course of action
- Guidance that’s not only strategic but practical and grounded in real-world outcomes
We understand the pressure audits bring and work diligently to alleviate that stress. Whether you’ve received a letter or have already entered the audit process, our team can help you take control.
Who We Help With IRS Audit Representation in New Jersey
IRS and state audits can affect anyone—whether you're an individual taxpayer or running a business. At GTA Accounting Group, we represent clients across New Jersey from all walks of life. If you’ve received an audit letter, had prior tax issues, or are unsure how to respond to a government notice, we’re here for you.
We Commonly Represent:
- Individuals facing IRS audits related to income reporting, deductions, or investment activity
- Self-employed professionals and freelancers audited for business expense claims
- Real estate investors and landlords with rental income flagged for review
- Small business owners undergoing payroll, sales tax, or income tax audits
- High-income earners selected due to income thresholds or audit profiling
- Clients with back taxes, amended returns, or prior-year inconsistencies
- New Jersey residents being audited by both the IRS and the NJ Division of Taxation
- Taxpayers dealing with automated or correspondence-based IRS audits
You don’t have to face the IRS or the State of New Jersey alone. We help you respond appropriately, defend your filings, and reach the best possible outcome.
What’s Included in Our Audit Representation Services
When you’re being audited, the details matter. That’s why our audit representation services are built to support you at every stage—from the moment you receive a notice to the final resolution of your case. At GTA Accounting Group, we handle the complex work so you can focus on moving forward.
Our Comprehensive Services Include:
- Review and Analysis of Your Audit Notice
We begin by reviewing the letter from the IRS or New Jersey Division of Taxation, along with your past tax returns and your past tax returns, to determine precisely what is being questioned. - Direct Communication with the IRS or NJ Tax Authorities
You don’t have to deal with the IRS yourself. We’ll respond to all audit letters and requests for documents and handle conversations with auditors on your behalf. - Preparation and Organization of Required Documentation
We help you collect, organize, and present supporting records that clearly explain and defend your tax filings. - Audit Strategy and Defense Planning
Based on the audit's scope, we develop a plan outlining how to respond, prioritize, and reduce the risk of additional taxes or penalties. - Representation at All Audit Meetings
Whether it’s a phone interview, video call, or in-person audit, we represent you and speak on your behalf—ensuring everything is handled professionally and accurately. - Negotiation of Resolutions or Settlements
If adjustments are proposed, we work to limit your liability and explore solutions like installment agreements or penalty relief when applicable. - Post-Audit Support and Prevention Guidance
After the audit, we recommend avoiding future issues, improving recordkeeping, and planning for any financial impact.
With GTA Accounting Group in your corner, you’re not just responding to an audit—you’re managing it with professional help, clarity, and control.
What Is an IRS Audit?
An IRS audit is an official review of your tax return and supporting documents to verify that your income, deductions, and credits are accurate. The IRS may also compare your records to third-party sources such as W-2s, 1099s, or bank data.
Why Does the IRS Audit Taxpayers?
Audits can be triggered by:
- Income that doesn’t match what was reported by employers or clients
- Deductions that appear unusually high for your income level
- Certain types of tax returns (like self-employed Schedule C filers)
- Large charitable donations or real estate losses
- Random selection or computer scoring that flags potential risks
Types of IRS Audits
There are three main kinds of audits:
- Correspondence Audit – Conducted by mail, typically requesting clarification or documents.
- Office Audit – Conducted at a local IRS office; involves a more detailed review.
- Field Audit – An IRS agent visits your home or business for an in-depth examination.
What to Expect After Receiving an Audit Notice
- You’ll receive a letter that outlines what years or items are being reviewed.
- The IRS may ask for receipts, bank statements, or other documents.
- You’ll be given a deadline to respond.
- Depending on your response, the audit may be resolved quickly or escalated to meetings and further requests.
Your Rights as a Taxpayer
- You have the right to be represented by a qualified tax professional.
- You have the right to privacy, respect, and a clear explanation
- You can appeal or challenge audit results through formal channels
Our job is to ensure your rights are protected and that your side is presented accurately and thoroughly.
Understanding the IRS Audit Process
The process may seem confusing or intimidating if you've never been audited. At GTA Accounting Group, we break down the process step by step so you always know what to expect and how we can help at each stage.
IRS vs. NJ Division of Taxation Audits
If you’re a New Jersey resident, you could be audited by either the IRS (federal) or the NJ Division of Taxation (state)—or, in some cases, both. Understanding the differences can help you prepare and respond effectively.
How IRS Audits Work
- Focused on federal tax returns: income, deductions, credits, and filing accuracy
- Often triggered by discrepancies, random selection, or high-risk factors.
- May involve correspondence, office interviews, or field audits
This can include reviewing business returns, self-employment income, or investment activity.
How New Jersey Division of Taxation Audits Work
- Focused on NJ state tax returns: income allocation, residency, sales tax, payroll, and more
- Frequently triggered by:
- Mismatched income on state vs. federal returns
- Claims of out-of-state residency while maintaining a NJ home or job
- Businesses failing to remit sales or payroll taxes properly
- This may involve in-person visits, phone interviews, or requests for documentation.
Key Differences
IRS Audit
NJ Tax Audit
Scope
Federal income and tax reporting
State income, sales, and payroll taxes
Triggered by
Federal filing errors or red flags
NJ residency issues, business compliance
Penalties
Federal interest & penalties
NJ interest, late fees, and license holds
Authority
U.S. Department of Treasury
NJ Department of the Treasury
Can One Trigger the Other?
Yes. If the IRS audits you and adjustments are made, the NJ Division of Taxation may follow up to assess whether those changes affect your state tax liability—and vice versa.
GTA Accounting Group is uniquely equipped to represent you in federal and NJ audits. We understand the filing and documentation requirements for both levels and provide the support you need, regardless of who initiates the review.
Our Audit Defense Process
At GTA Accounting Group, we take a structured, hands-on approach to representing you during an audit. From the first notice to the final resolution, we focus on protecting your rights, reducing stress, and helping you reach the best possible outcome.
Step-by-Step Audit Support
Step 1: Initial Review and Consultation
Step 2: Document Request and Risk Assessment
Step 3: Direct IRS or NJ Communication
Step 4: Preparation of Documentation and Evidence
Step 5: Audit Meeting Representation
Step 6: Negotiation and Resolution
Step 7: Post-Audit Guidance
Testimonials from NJ Audit Clients
At GTA Accounting Group, we’ve helped individuals and businesses across New Jersey successfully respond to audits and regain control of their finances. Here’s what some of our clients have shared about their experience:
❝ I received a notice from the IRS, but I had no idea what it meant. GTA took over and handled all the communication, and the audit closed with no additional tax due. They were calm, clear, and incredibly helpful. ❞
Maria C.
Teacher, Clifton, NJ
❝ Our restaurant was flagged for underreporting sales tax. GTA organized our records, met with the New Jersey auditor, and negotiated a settlement we could manage. Because of their support, we were able to keep our doors open. ❞
Anthony D.
Small Business Owner, Newark, NJ
❝ I had multiple years of business losses and got audited. GTA helped prove I was running a real business, not a hobby. They saved me thousands and gave me tools to stay organized in the future. ❞
Jason B.
Consultant, Jersey City, NJ
❝ After ignoring a notice for too long, I was afraid the penalties would catch up to me. GTA stepped in, talked to the IRS, and worked out a reasonable payment plan. I wish I’d called them sooner. ❞
Denise L.
Freelancer, Princeton, NJ
What Happens If You Ignore an Audit Notice?
Ignoring an audit notice from the IRS or the NJ Division of Taxation will not make it disappear. It can lead to more serious consequences that are much harder—and more expensive—to resolve later.
Here’s what can happen if you don’t respond:
You Lose the Right to Defend Yourself
If you don’t respond by the deadline, the IRS or state may complete the audit without your input. This means they’ll assess additional taxes based on assumptions or third-party data, which may not accurately reflect your situation.
You May Be Assessed Higher Taxes
The government can issue a notice of deficiency (a proposed assessment), which assumes you owe more than you might be liable for. Without documentation or an explanation, you could end up with a larger tax bill than necessary.
Penalties and Interest Add Up
In addition to the taxes assessed, penalties for late response, underpayment, or negligence can be added to your bill. Interest continues to accumulate until the full amount is paid.
You Could Face Collection Action
If the tax balance isn’t resolved, the IRS or state may take collection action, including:
- Wage garnishments
- Bank account levies
- Property liens
- License or registration holds
You Forfeit Your Appeal Rights
Once a certain amount of time has passed, you may lose the right to appeal the audit results. This can limit your options and make it harder to negotiate a fair resolution.
At GTA Accounting Group, we strongly encourage clients to act promptly—ideally within a few days of receiving an audit notice. The sooner we’re involved, the more options we have to defend your case, present accurate documentation, and reduce any financial impact.
Protect Your Finances. Defend Your Rights.
If you’ve received an IRS or NJ tax audit notice, don’t face it alone. Even simple audits can quickly become complicated—and waiting too long to respond can limit your options.
At GTA Accounting Group, we help you understand exactly what’s happening, what’s being questioned, and what steps to take. We handle the communication, represent you professionally, and work toward the most favorable resolution possible.
You have rights, you deserve clarity, and you deserve a local team that knows how to handle both the IRS and the New Jersey Division of Taxation.
Let’s start with a free, confidential audit review.
Call our New Jersey office or click below to schedule your consultation.
Frequently Asked Questions – IRS Audit Representation in NJ
Understanding the audit process can ease your concerns. Here are some of the most common questions we receive from clients in New Jersey:
Get in touchWhat should I do if I get an IRS audit letter?
Can you represent me before the IRS or the New Jersey Division of Taxation?
How long does an IRS audit take?
Will an audit always result in owing more taxes?
What if I already missed the audit deadline?
Can you help if I’ve been audited before?
Will the IRS notify the NJ Division of Taxation?
GTA Accounting Group
401 Park Ave S 10th Floor, New York, NY 10016, United States