Secured with SHA-256 Encryption
Compare Quotes From Top Companies and Save
Secured with SHA-256 Encryption
If you are undergoing an audit and need to substantiate, or prove, the statements you made on your tax return, pull out your stash of canceled checks, logs, receipts, bank statements, or any other financial documents related to your tax return. You will be asked to show all financial records that you used to show your taxable income when filing the tax return to prove you did so correctly.
→ Read MoreThere are a variety of red flags that the IRS uses in order to determine whether an IRS tax audit is warranted.
→ Read MoreIRS audits are among the most feared situations for most taxpayers, in part because they are so invasive and carry with them the potential for back taxes to be assessed, as well as the potential for additional interest, fines and other penalties to be assessed. Fortunately, there are far more taxpayers than there are IRS employees available to do audits, so the IRS must be choosy about who it decides to audit in any given year.
→ Read MoreThere are times when an attorney is necessary, but also many times when you can handle the problems yourself with a little patience and good records. The only time that it is truly necessary to hire an attorney in the event of an audit is when the IRS is charging you with a crime.
→ Read MoreThe IRS uses three techniques when selecting audits. The first technique is computer screening and random selection. The IRS sets up random numerical formulas to select a certain number of people for auditing within a specified group. The next technique is related examinations. When the IRS audits a business, they also audit anyone who worked for that business. If your records do not match the documents they have on file, then you will be formally audited. The final technique is document matching.
→ Read MoreAlthough the Internal Revenue Service (IRS) has increased the number of IRS audits in the past decade, most taxpayers do not need to worry about being selected for a tax audit. The IRS spends most of its time and resources pursuing very high income taxpayers and corporations. Taxpayers who earn less than $100,000 need not worry as long as they are honest and file their tax returns on time. The IRS selects tax returns for tax audit by using a computer program called the Discriminant Inventory Function (DIF) system.
→ Read MoreAccording to the Internal Revenue Service (IRS), tax returns are selected for audit by using a computer program called the Discriminant Inventory Function (DIF) system. This system gives each tax return a numerical score. Nearly all tax returns that receive a high DIF score are audited because the IRS believes that there is a good chance that after auditing high DIF score tax returns, there will most likely be a change in the amount of tax owed by the taxpayer.
→ Read MoreThere is no limit on how many times a taxpayer can be audited by the IRS. Typically, the IRS will initiate a second audit if they discover discrepancies during the first audit that gives them reason to believe that additional tax returns for other years may also contain inaccurate declarations of income or improper deductions. If you are a business owner and your business tax return gets audited, it is a strong possibility that the IRS could issue an audit notice for your personal return.
→ Read MoreThe IRS typically looks for discrepancies in the following: Schedule A (itemized deductions, Schedule C (profit or loss from a business) and Schedule F (profit or loss from a farm).
→ Read MoreFind the right lawyer for your legal issue.
Secured with SHA-256 Encryption
