An IRS audit letter can typically spell bad news for your finances. If you are becoming the subject of an audit it’s important to not get too stressed out about the process. As soon as you receive an audit notification from the IRS it’s important to act quickly and to speak to a tax attorney as soon as possible.
The IRS is responsible for auditing 1 million returns every year and one of the first questions that you might ask once you receive the letter is why the IRS picked you. Here are some of the main reasons why the IRS may have selected you for an audit:
A Mixup In The System
There are glitches within the IRS tax return system that can quickly fast-track your tax return towards an audit. If you forgot to attach a form, there are numbers that don’t match up in your tax return or you did your tax return for the first time as a small business and handled things incorrectly, there’s a chance that you could be marked for an audit. Small mixups and issues with your tax report will often flag you for an audit.
Involvement In Other People’s Taxes
If you’re involved in a business or partnership with another individual who selected for audit or suspected of tax fraud, you could become subject to an IRS criminal investigation which could mean auditing your tax return. If your return is linked to anyone that’s been involved in some unsavory financial activity, the IRS could continue to move on your tax return and audit you.
It’s Time For Your Audit In The Metrics
There’s a set formula in the IRS tax return system that will randomly audit tax returns to ensure consistency. The developed formula within the system makes sure that there is no industry that could seize with regular returns and this means randomly auditing the average citizen.
Evaluation of your tax preparation company: if you’ve used a company for tax preparation that has been informed on as claiming too much or submitting improper claims, the IRS line may flag every tax return that is prepared by the company. The IRS may simply be evaluating your tax preparer to make sure they are completing their due diligence.
If you’ve been selected for an audit you’ll first be notified by mail. The IRS does not have to initiate an audit through a telephone call and only 25% of the audits that the organization carries out are through a field attendant.
Top Reasons To Contact An IRS Tax Lawyer
Speaking to an IRS tax lawyer can make sure that your tax documents can be properly inspected. An IRS tax lawyer will be able to go through the correspondence you’ve had with the IRS and check it to provide you with advice on how to proceed. As soon as you receive any correspondence from the IRS, you will be able to pass it on to your tax attorney for clarification. If the IRS sends a tax bill to your accountant the tax attorney will also be able to devise what information is accurate and if you could dispute the bill or devise a strategy to avoid part of the payment. Rather than paying the full amount, it might be possible to form a quick settlement on your tax bill that could see you paying less.
By working with a tax attorney and making sure that you can respond quickly and effectively, you’ll be able to appropriately respond to an IRS audit letter. and be prepared for any future correspondence.
Contact us today to take advantage of our years of experience in tax law. We can help you through criminal and civil tax audits with the best legal advice.