How Does The IRS Audit You?
- June 15, 2019
- Posted by: Platinum Tax defenders
- Category: Tax Resolution
The words tax audit can be quite scary. Many taxpayers will be fortunate enough never to encounter an IRS audit during their lifetimes. Some of us might struggle with back tax debt here and there. However, most of us won’t face an IRS audit. However, what if you do encounter ran IRS audit? The first thing you’ll want to do is contact a tax resolution company. A tax relief company will be able to walk you through an IRS audit. However, how exactly can the IRS audit you? The IRS handles inspections in several ways. Below are some of the ways the IRS may hold an audit with you. The most important thing to remember when going through an audit is to stay calm. Stay calm, and then call your tax resolution professional.
Audit By Mail
Three-fourths of all IRS audits are done by mail. The IRS will ask you a few questions about your current or previous tax filings. You can answer these questions by mail. Also, the IRS will require you to send evidence that backs up your answers. The IRS indicates that it will also send you specifics regarding its request. For instance, they might ask for additional information about specific items shown on your tax return. Items they might inquire about include income, expenses, and itemized deductions. Usually, the IRS will request a change to your tax filing account, and you might have to pay. Other times, you might get a refund from your IRS audit. The lesson here is that an IRS audit isn’t always terrible. However, it’s better to be safe than sorry. So, if you’re facing an IRS audit, call a tax attorney as soon as possible.
Sometimes, your IRS audit might require an in-person interview. You can request a face-to-face audit if you have “too many books or records to mail.” In this case, you can meet with the IRS in-person if your situation requires much evidence to submit. However, one thing to note is that it’s essential to have representation when visiting the IRS in person. The IRS can be very intimidating over the phone, and especially in person. If you have a tax attorney with you, you’re more likely to experience a smoother audit process. Also, sometimes you don’t choose an in-person meeting, but the IRS will call one. You have the right to attend with a tax attorney or accountant. As a note, a tax attorney cannot testify against you in court. An account, however, can testify against you in court.
What To Bring To An In-Person Audit
If you have an in-person audit with the IRS, bring all pertinent information to their inquiry. They will send you a letter beforehand indicating what information they need. The IRS could request five years’ worth of bank statements or receipts for specific expenses. For example, if you went on more trips than usual for work, you will need evidence of those expenses.
Field Visits from The IRS
When you have a field visit from the IRS, you know it’s serious. Field visits are more expensive for the IRS to organize than a mail audit. The IRS will not hold a field visit unless they have reasonable cause to believe that an appointment is necessary. A field visit will take place when several red flags show up on your account. Some of these red flags could indicate deliberate under-reporting of your actual tax burden. Red flags could include living a lifestyle that shouldn’t be possible based on your declared income. Another red flag would be declaring unusually high expenses for a particular type of deduction. Also, you may not have reported an income stream, such as an investment. The IRS has a variety of red flags they can raise against you. If the IRS feels your case is essential, you will get a visit.
Avoiding An Audit: Work With Tax Relief Expert
There are ways to avoid a tax audit. One of the ways to prevent a tax audit is to prevent it from happening in the first place. If you own your own business and it starts to do very well, hire an accountant or tax professional. An accountant or tax resolution professional can save you more in taxes than you pay in fees. If the IRS audits you, you’re in a safe position from the start when working with a tax relief professional. Audits will usually occur from something the IRS sees on your tax returns. You can avoid mistakes by having a tax relief professional to prepare your taxes. Most errors on a tax return happen because of a lack of understanding of the tax system. Working with a tax relief professional will help you understand the tax system and current tax law.
Keep Good Records
If you ever face an audit, you will have to provide records. It’s a good idea to keep all the documents where you can easily find them. The IRS can usually include returns from the last three years in an audit. If there is a substantial error that they see, they could go back even further. However, the IRS usually doesn’t go further back than six years. Because the IRS can go back beyond three years, keep records of your expenses for six years just in case. Keeping records could make or break our IRS tax audit. Always consult a tax relief professional before entering an audit with the IRS.
Get Help From A Tax Relief Professional
No matter how you avoid an IRS audit, hiring a tax relief specialist can ensure you remain in good standing. A tax attorney can help walk you through an audit with the IRS. An IRS tax audit can be intimidating, and you don’t want to go through it alone. A tax resolution specialist can also negotiate with the IRS on your behalf and submit the necessary paperwork. An IRS audit can leave you in bad financial shape. The IRS only wants to get what money you owe them in back taxes. Often, they are willing to help you settle back taxes, but you have to know how to try. That’s where a tax relief services company can come in handy. When you hire a tax resolution professional, there are other methods you can use to avoid expensive IRS audit. Call Platinum Tax Defenders for a free consultation today.