Issues Associated with IRS Audits For Martin Marietta Materials Employees

Healthcare Provider Update: Healthcare Provider for Martin Marietta Materials The healthcare provider for Martin Marietta Materials is primarily UnitedHealthcare. They offer a range of health insurance plans to employees, which typically include various coverage options catering to both individual and family needs. Potential Healthcare Cost Increases in 2026 As we look toward 2026, Martin Marietta Materials anticipates significant challenges as healthcare costs are projected to rise substantially, driven by several factors. The expiration of enhanced ACA subsidies may lead to a surge in premiums, with some states witnessing increases of over 60%. Additionally, industry-wide medical costs are expected to rise by approximately 8.5%, spurred by ongoing inflation in healthcare services and the increasing costs of prescription drugs. This confluence of factors means that many employees could face a steep increase in their out-of-pocket expenses, compelling the company to consider strategic adjustments to its health benefits offerings. Click here to learn more

What Is It?

There are numerous issues associated with IRS audits. As a Martin Marietta Materials employee, you should know your chances of being audited, the different types of audits, strategies for handling audits, your rights with respect to an audit, and how to appeal audit decisions.

Your Chances of an IRS Audit

Typically, only a small percentage of individual income tax returns are audited. Audit rates can vary from year to year, however, owing to several factors, including staffing levels at the IRS. How is a return selected for exam? Often, it's a case of simple computer scoring. When your Martin Marietta Materials federal income tax return is processed, a computer program called the Discriminant Inventory Function (DIF) system assigns a 'DIF' score.

The higher the 'DIF' score, the greater the potential--in the computer program's estimation--that an audit will result in the collection of additional taxes. Your return as a Martin Marietta Materials employee may also be selected. The reasoning behind this is there appears to be a discrepancy with information reported from third parties (e.g., Forms 1099 and W-2), because of one or more specific items reported on your return, or because of any information available that may indicate your return is not completely accurate (e.g., public records, newspaper articles).

As a Martin Marietta Materials employee, it is worthy to note that while there's no way to know exactly what will trigger an audit in a given year, past years have seen an apparent focus on self-employed individuals (especially those running cash-centric businesses), those claiming home office deductions, and those with itemized deductions exceeding the average for individuals with similar income levels. In addition, high-income taxpayers have historically seen a higher degree of examined returns. As a Martin Marietta Materials employee, it may be important to note that you are least likely to have your return audited if you don't itemize deductions, and all or most of your income is subject to withholding.

Types of Audits

There are three basic types of audits that you should recognize as a Martin Marietta Materials employee: correspondence audits, office audits, and field audits. In a correspondence audit, you mail your records to the IRS. In an office audit, you bring in your records to the IRS for examination. In a field audit, the examination takes place at your office or your representative's office. The IRS decides the time and type of audit, with the requirement that the arrangement be reasonable under the circumstances.

What Tips Should You Bear In Mind When Dealing With The IRS?

There are a number of tips you should keep in mind when dealing with the IRS. In particular, you should know your rights as a Martin Marietta Materials employee regarding IRS audits.

Know Your Rights

With the exception of criminal investigations, as a Martin Marietta Materials employee you have the right to an explanation of the audit process and your basic rights at or before the time of your initial in-person meeting with the agent. Your other rights during the audit process include the following:

•  The right to representation by an attorney, a CPA, or an enrolled agent
•  The right, with advance notice, to tape-record meetings with the IRS agent
•  The right to claim additional deductions you didn't originally claim on your return

According to IRS Publication 556, Examination of Returns, Appeal Rights, and Claims for Refunds, the IRS attempts to avoid repeat examinations of the same items, but sometimes this happens. For Martin Marietta Materials employees, if your return was examined for the same items in either of the two previous years and no change was proposed to your tax liability, you should contact the IRS to request that the examination be discontinued.

Keep Good Records

As a Martin Marietta Materials employee, you should keep records of all income (including nontaxable income, gifts, and savings). Likewise, you should keep detailed records regarding expenses and deductions.

Limit Direct Contact with IRS Personnel

Keep direct contact with IRS personnel to a minimum. As a Martin Marietta Materials employee, the less contact you have, the less opportunity an IRS examiner will have to raise unexpected questions. Also, limited direct contact may help to keep the audit focused on the specified issues.

Tip:  If you have specific questions or are having difficulty understanding the audit process, consider consulting a tax professional before contacting the IRS examiner. This way, you may be able to avoid the possibility of opening up new issues for audit.

Avoid Particular Mistakes in Your Dealings with the IRS

The following are mistakes you should avoid as a Martin Marietta Materials employee dealing with the IRS:

•  Ignoring correspondence from the IRS, or not adhering to instructions and deadlines
•  Proceeding before understanding your rights or obtaining representation
•  Coming to an audit appointment without records or requested documentation
•  Projecting a negative attitude toward the IRS
•  Neglecting current tax obligations (e.g., not filing a current year tax return while dealing with an audit of a prior year tax return)
•  Signing any documentation without fully understanding it, or having it reviewed by a professional
•  Omitting your Social Security number on documents and correspondence

What Are Some Practical Strategies for Handling IRS Audits?

Consider doing the following in connection with an audit of your return:

•  Before your initial interview with the IRS agent, retain and meet with a tax professional to discuss strategies and expected audit results.
•  Volunteer little or no information to the IRS agent. Simply have your representative respond to the agent's questions.
•  Keep detailed records of the materials you submit to the agent, the questions asked by the agent, and the times of these activities.
•  Know when it is time to conclude the audit and move the case to the next level. Avoid wasting time by submitting additional information after the agent has made a decision.
•  Avoid agreeing to extend the statute of limitations unless you expect a favorable audit report. Extending the statute of limitations gives the IRS agent more time to examine your return and possibly discover more potential problems.
•  Settle the audit at the lowest level possible. This way, you save expense and avoid the likelihood of other issues being raised.
•  Be thoroughly prepared. Agents generally don't waste time conducting an in-depth audit if they see early on that a taxpayer's records clearly substantiate the items claimed on the return.

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Be Clear on Proposed Changes

As a Martin Marietta Materials employee you should also understand why an IRS agent proposes to disallow an item on a return, to increase an income item, or to make other adjustments. It is imperative to never accept an agent's word on what constitutes the law. Agents aren't experts on all aspects of the tax law. If you are a Martin Marietta Materials employee, you may want to consider seeking another opinion on the law from an attorney or other tax professional.

Negotiations

For Martin Marietta Materials employees, although you can't officially 'bargain' with an IRS agent, unofficial negotiation happens all the time. For example, if there are several items involved in your discussion with an IRS agent, and you are more confident in your position on some items than others, there's room for discussion.

Be Careful About Signing the Examiner's Report

When you sign the examiner's report, you are agreeing that you owe the specified tax. You can't appeal the report within the IRS and can't file a petition in the Tax Court. If the audit is completed and the agent proposes to disallow items to which you feel entitled, don't sign the report.

Tip:  If you are uncertain about whether to sign, consider consulting a tax professional before deciding.

Waiving the Statute of Limitations

An IRS auditor may ask you to waive the statute of limitations to allow more time to examine the case. If you refuse to sign the waiver, the examiner will generally disallow all the items he or she wanted to audit and issue a Notice of Deficiency. This Notice of Deficiency requires you to file a petition with the Tax Court within 90 days to avoid having to pay the tax until the Court considers the merits of the case.

Tip:  It may be to your advantage not to sign the waiver if there are items on the return that you would rather the agent not probe into during an audit. In the Tax Court, you will still have to substantiate your treatment of the items in question, but you generally won't face the kind of probing that can open up examination on other items.

Tip:  You also have the option of asking for a restricted waiver, which extends the limitations period for only a particular item on the return.

Unagreed Issues

Martin Marietta Materials employees must also account for how unagreed issues have long processing times because they go through an internal IRS review process. There is often considerable delay before an agent's report, including unagreed items, is issued. If the IRS appeals officer feels that an issue may not have been treated properly, the case may be returned to the agent, causing further delays. If you need an immediate audit report before completion of the review process, you can request it from the agent or the group manager at the completion of the audit.

How Do You Appeal an Audit's Findings Within the IRS or In Court?

As a Martin Marietta Materials employee, you can appeal the findings of an audit through the IRS appeals office. If you can't resolve the matter there, you can take it to court.

IRS Appeals Office Level

Assuming that you don't agree with an examiner's proposed changes, and don't sign an agreement form, you'll receive a package from the IRS that includes a copy of the examination report, an agreement or waiver form, a copy of IRS Publication 5, and a letter ('30-day letter') notifying you of your right to appeal the proposed changed within 30 days. You have 30 days from the date of this letter to appeal the proposed changes. To file an appeal, you have to follow the instructions in the letter (be sure to follow the instructions carefully, and act within the 30-day period).

The IRS Appeals Office that will hear your appeal is separate from the Examination Division that proposed the changes on your return. Appeals conferences can be done in person, over the phone, or through correspondence. You and your representative should be prepared to discuss all issues in dispute at the appeals conference.

Appealing In Court

If you don't respond to the 30-day letter sent to you after an audit, or if you do not agree with the findings of the Appeals Officer, you'll receive a notice of deficiency from the IRS (referred to as a '90-day letter'). As a Martin Marietta Materials employee you have 90 days from the date of this letter to file a petition with the U.S. Tax court.

Caution:  If the 90-day letter is addressed to you outside of the United states, you generally have 150 days to file a petition with the U.S. Tax court.

Caution:  You cannot petition the U.S. Tax court before receiving a notice of deficiency from the IRS.

The advantage of appealing through the U.S. Tax Court is that, provided you file your petition on a timely basis, you don't have to pay the proposed tax first.

Tip:  If you have a net worth of $2 million or less, meet certain other conditions, and prevail in Tax Court against the United States, you may be awarded litigation costs.

To file suit in U.S. District court or the Court of Federal claims, you must first pay the tax that results from the audit, and then file a claim for a credit or refund with the IRS. When your claim is totally or partially disallowed by the IRS, you'll receive a notice of claim disallowance. At this point, you can file suit. Additional information can be found in IRS Publication 556, Examination of Returns, Appeal Rights, and Claims for Refund.