Tax Audit – You are being audited by the IRS
How Bad is It When You’re Notified of an IRS Tax Audit?
You have heard of the dreaded IRS tax audit. However, an audit is pretty basic but can become complicated if you do not have the right assistance. What is a tax audit? An IRS tax audit is basically the IRS double-checking your calculations to make sure there are not any discrepancies in your tax return.
Audits are not limited to the federal government. Periodically, state tax authorities conduct audits, too. Honestly, if you’re telling the truth, you need not worry. Nothing is fundamentally sinister about an IRS or state audit.
It is highly recommended if you’re faced with a tax audit, seek the help of an experienced tax professional. One such company is Tax Relief Systems.
We have helped many clients navigate the tax audit maze. Call today for a free consultation or complete our easy online form. (877)829-0040
According to a recent survey, 79% of taxpayers attribute the fear of being audited as one of the factors keeping them honest when filing federal income taxes. According to the same survey, 96% of people say that their integrity is another factor. The good news is the fear of getting audited far surpasses the probability of it occurring.
In any given year, the IRS only audits 1% of all tax returns. The majority of audits occur for taxpayers reporting more than $10 million in adjusted income.
Why the IRS Conducts Audits
Tax audits are conducted by the IRS to manage and minimize the “tax gap” otherwise known as the difference between the amount the IRS deems owed and what is received. Periodically, tax audits are random, whereas some are flagged for audit due to suspicious activity.
The key is to not pay more than you owe, while not crossing any lines that trigger IRS red flags. We have put together a quick list of the seven most common red flags:
- Math Errors
- Failure to Report Some Income
- An Increase Amount of Charitable Donations
- Schedule C Reporting Too Many Losses
- Reporting Excess Business Expenses
- Home Office Deduction
- Neat Round Numbers
If you notice you are susceptible to an audit due to any of these reasons, let our team know. We can work with you to prepare against an audit and remove flags from future tax returns.
What to Do If You Receive a Tax Audit Notification
When you receive a tax audit notification, there are some things you need to do and others you do not do. These things should be followed to successfully navigate the audit maze.
- Do not ignore the auditor
- Do not lie to the auditor
- Contest if there is a dispute – You have the right to appeal any decision by the auditor. It is well within your tax rights.
- Quickly file all past due tax returns
- Be fully prepared for the audit
- Issues with the auditor should be taken to the auditor’s manager
- Get all requests from the auditor in writing
- Obey and respect all deadlines
- Contest penalties
If anything is in question, seek a higher authority – professional help is always recommended unless you know and understand “IRS speak”.
The term audit can be scary and nerve-rattling. Don’t let be. Make the call and get the trusted team on your side.
Tax Relief Systems is ready to assist in all things tax-related even audits. We are your tax professionals.
Contact us directly at (877)829-0040 or complete our secure online form.