Website design By BotEap.comIn reality, the IRS audits very few of the millions of tax returns it receives annually. The average number of declarations audited annually is around 2%. The IRS does not routinely audit a tax return unless there is some kind of key indicator, such as a high level of deductions compared to income earned, a deduction that requires documentation, or a specific item that is on the “red flag” list. “. If you receive a letter stating that you are going to be audited, you should contact your IRS tax attorney or accountant immediately for help in preparing a response.

Website design By BotEap.comReasons for an IRS Tax Audit

Website design By BotEap.comThe IRS has a standard list of reasons to request an audit. The fact that your return falls into one of these categories does not automatically mean that it will be audited, but it certainly increases your chances. The IRS may audit you if you include any of the following information, although this is not an exhaustive list:

  • you are autonomous,
  • You submit a mileage record showing the business use of your vehicle,
  • Try to deduct home office expenses,
  • Earn an excessively high salary, or
  • Submit a large list of itemized deductions.
Website design By BotEap.comThere really is no way to honestly prepare your tax return without including all the relevant information about your business and income, but if you regularly include any of the above items when preparing your return, you shouldn’t be surprised if you ever get audited.

Website design By BotEap.comThe IRS Audit Process

Website design By BotEap.comDon’t let the idea of ​​an IRS tax audit scare you to death. An IRS tax representative won’t show up at your door one morning demanding to see all your financial documents. About 1/3 of all audits are done by mail, and in most cases, the IRS will not audit all of your tax return, but part of it. For example, if you regularly deduct business meals, the IRS may request receipts.

Website design By BotEap.comThe letter you receive from the IRS will describe exactly what part of your tax return is in dispute. IRS tax attorneys will use the information in that letter to help you prepare your IRS audit defense.

Website design By BotEap.comYour rights during an IRS audit

Website design By BotEap.comYou have several rights during an IRS audit. These include, but are not limited to:

  • The right to have an IRS tax attorney or accountant with you at your audit. Your attorney or accountant must have special permission to practice before the IRS;
  • The right to make a tape recording of your audit meeting if you give the IRS at least 10 days notice of your plan to do so;
  • The right to have penalties waived if you can prove that any error on your tax return was due to bad advice given by an IRS employee; Y
  • The right to give your IRS tax attorney power of attorney so that you do not need to be present at the IRS meeting at all. This often buys your lawyer time because he or she will have to request an extension before the meeting to give them enough time to gather details from you in person beforehand.
Website design By BotEap.comThe best way to avoid an IRS tax audit is to prepare an honest and accurate tax return each year. If you make a mistake, the best IRS audit defense is one that includes a qualified IRS tax attorney representing you before the IRS.

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