Tax Audits

Getting audited can be a frightening experience. A qualified tax attorney can make all the difference. Ask a question below.
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Alicia Dearn, Esq.

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Common Tax Audit Questions

How does the new tax law affect me?

The Tax Cuts and Jobs Act became effective as a law on January 1, 2018. Learn what the new law means for businesses, homeowners, and residents of certain states.

What is a tax audit?

An IRS or state tax audit is a method for verifying that the information included in your returns is accurate and complete. With recent IRS staff reductions, federal audits are decreasing, but there is still always a chance that you could be audited. Often returns to audit are selected by computer. If an audit is requested, you will be notified by mail and sometimes even a couple of years after the filing date. It is important to keep careful and accurate records in case of an audit.

What should I do if I'm getting audited?

First, you should absolutely seek tax audit help by getting in touch with a tax attorney. Tax attorneys often specialize in the audit process and, if they can't make the audit go away completely, they can often help ameliorate some of the emotional and financial burden. Past securing legal representation, you'll want to be forthright and honest with your IRS auditor. Many also recommend that you "audit" yourself before you speak with the IRS to try to find out where you may have erred. If you find that you are missing records, you should take the time to request copies of your missing tax information.

What triggers an IRS tax audit?

If you don't file your taxes for a year (or several), you're inviting an IRS tax audit. Likewise, if you have excessive deductions for your business, the IRS may request an audit. And, of course, legitimate mistakes you may have made on your return can trigger a tax audit as well. When those sorts of honest mistakes happen, the IRS will often just perform a mail audit, since nothing purposeful or criminal likely occurred on the taxpayer's end.

Are there several kinds of tax audits?

Depending on the depth of your tax issues, the IRS can audit your taxes in a few different ways. First, there are mail audits. Those may involve nothing more than the IRS asking you to verify a deduction or charitable gift and the audit could be finished as soon as you do so. These are the most typical and least invasive.

Then, there are office and field audits. An office audit means you'll go into a nearby IRS office with certain files they'll ask you to bring and perhaps answer questions. You can bring a tax attorney to an office audit. A field audit means the IRS is sending someone to your home or business to look things over. This can be triggered by suspicious deductions, among other things.

Does the IRS contact individuals by telephone or email?

If you receive a telephone call or email about an audit or tax debt owed, it is often not the IRS contacting you. Nearly all legitimate IRS correspondence is conducted by mail using the United States Postal Service. While the IRS does make calls and visits to taxpayer's homes or businesses, most often you will receive notice of such actions. In most cases, you should be suspicious of phones calls reportedly from the IRS especially if the calls are threatening.

How far back can the IRS request audits?

Generally, audits do not go back more than three years, but they can go back as many as six. Most audits are requested within two years. Limitations can be extended if you need more time to obtain the documentation requested. If you need to know more about extensions, contact a tax lawyer.

How does the audit process end?

Audits are concluded in one of three ways. The simplest is that everything included in the return is proved accurate and no actions need to take place. The second is when the IRS proposes a change and you agree to that change. The change may result in a modification in your refund or debt owed. The last and most difficult is when the IRS proposes a change and you disagree with that change. If you disagree with the audit results, you will need to request a meeting with an IRS manager and you may need to file an appeal. You should ask a tax lawyer to help you navigate disagreements with the IRS.

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