IRS Audit and CPA responsibility

Yes, your original agreement with your CPA didn't contemplate you being audited, and most likely was probably just to prepare your tax return, as well as perhaps answering a quick question in between preparing your returns, with anything else NOT being covered by that return preparation fee. An IRS audit is an unpredictable separate obligation of yours - not your CPAs - that you should pay extra for. Your CPA doesn't guarantee your returns, that's why you, not the CPA, signs them under oath, and you're 100% responsible for the contents. But if this audit was triggered by some mistake(s) on the part of your CPA, or if their audit help has not been all that helpful, those are different issues, and presumably issues that are negotiable, if the cost of audit help wasn't made clear to you. Disclaimer: Please note that this answer does not constitute legal advice, and should not be relied on, since each state has different laws, each situation is fact specific, and it is impossible to evaluate a legal problem without a comprehensive consultation and review of all the facts and documents at issue. This answer does not create an attorney-client relationship.

This will largely depend upon the terms of your agreement, but generally when you pay a CPA to file your taxes, this does not include any additional services related to representing you in or assisting you with an audit. Additionally, you may wish to contact a tax attorney about this issue. While a CPA can represent you through the audit process, many CPAs are not experiencing with submitting appeals to the I.R.S.'s administrative law division. Additionally, should your tax issue progress to the point that it needs to be appealed to a local district/circuit court or the United States Tax court, a CPA will be unable to represent you at that stage.

You paid your CPA for tax return preparation. Representing you in an audit is outside the scope of that representation. That is why they are charging you for it, it is NOT included in the fee you paid to have your taxes prepared. THESE COMMENTS ARE NOT LEGAL ADVICE. They are provided for informational purposes only. Actual legal advice can only be provided after consultation by an attorney licensed in your jurisdiction. Answering this question does not create an attorney-client relationship or otherwise require further consultation.

You will need to check the engagement letter, if any, that you signed with your CPA for the year of the tax return that is being audited. This letter will provide the scope of work that your CPA was going to perform for you. It most likely does not cover IRS audit protection. If that is the case, then the work your CPA is performing for you now for IRS Audit assistance is new and additional work and should be covered under a new engagement letter with a new and different scope of work. If there is not a new engagement letter signed by you authorizing your CPA to do the work then you likely don't have an obligation to pay the bill. Similarly, if I show up to mow your lawn, mow it, and then demand payment from you, there'd be no obligation on your part to pay me absent an agreement between us (written or oral). Note that you could also have an oral agreement/understanding with your CPA, which could be enforceable to some extent but since there was no mention of that in your facts I will not address that. However, it sounds like your CPA may have provided you with some valuable work, so you may want to use the product s/he provided. If you do, then most likely you'd be obligated to pay the CPA for that work. But, you can use the fact that you didn't ask for the work to be done as a negotiating tool since there was no mutual understanding between you and your CPA. Finally, I always recommend that taxpayers obtain the services of an attorney or CPA that is well versed in IRS Procedure as well as the substantive tax laws of the underlying issues. I have had to unravel far too many situations where the taxpayer provided what s/he thought was an innocent answer, which only served to open a whole other "can of worms." Disclaimer: Please note that this answer does not constitute legal advice, and should not be relied on, since each state has different laws, each situation is fact specific, and it is impossible to evaluate a legal problem without a comprehensive consultation and review of all the facts and documents at issue. This answer does not create an attorney-client relationship.