Many people may only think about their taxes once or twice a year: tax time and when they have to make major financial decisions with potential tax implications. However, other people think not only about their taxes all year long, but also the severe penalties and, interest and other consequences they may face for an inaccurate or fraudulent filing.
The main difference between these groups of people is often a difference in philosophy, members of the first group typically work with a trusted tax professional. It may be a tax lawyer or a CPA, but they trust the advice they are given and may even request that the professional to only take safe positions on their taxes. Others may utilize popular tax preparation software in a careful and conscientious manner. The second group of people may choose to play fast and loose with their reporting, wait until the last moment to prepare their filing, or have the sinking feeling that what a cut-rate tax preparer says is too good to be true, but go along with it anyway due to a large refund.
Who Needs a Tax Audit Attorney?
What remains constant for both groups is that if you are selected for a tax audit, you need an experienced tax attorney who can handle your audit. A tax lawyer can handle the process and minimize the taxpayers interactions with the auditor so that misstatements or conduct due to anxiety over the process is no interpreted as a sign of fraud. Furthermore, if you believe that you have underlying issues with your tax filing, or criminal tax concerns, hiring a tax lawyer who can work to guide the process is essential. The strategic tax lawyers of the NewPoint Law Group can work to protect you from the large penalties, interest on unpaid taxes, and the dreaded referral to IRS Criminal Investigations Division. To schedule a confidential legal consultation, call 1-800-358-0305 today or contact us online.
How Did the IRS Choose Me For a Tax Audit?
For many taxpayers, the decision to audit can come down to the amount of income they reported to the IRS on their annual tax return. Consider that individuals with significant yearly incomes are much more likely to face an audit. In fact, some statistics show that taxpayers reporting $10 million or more in annual income, face a one-in-ten chance of facing an audit. However, before considering minimizing your income, remember that the IRS has an array of means to detect unreported income. And furthermore, after high-income individuals, the group that is second-most likely to face an IRS audit is people who report no gross income in a year.
Other reasons why people face an audit includes the failure to report income of any type or mischaracterizing the nature of income. The IRS engages in the processes of form matching and information matching. Form matching is premised on the fact that both the employer and contracted individual or employee submit a copy of the W-2, 1099, or other statements of income. If only one form is received, it is usually a pretty good indication that a mistake or fraud has occurred. Likewise, the IRS matches the information contained within the form. So if you are tempted to use only round numbers or to round down for a perceived tax benefit, reconsider your actions.
There are an array of other red flags that the IRS uses to detect possible tax fraud. For instance, a business that loses money year-after-year is probably a sign that something isn’t right. While the IRS understands businesses can lose money, it also understands that for-profit operations should, at some point, turn a profit. Likewise, high or inflated businesses expenses, or excessive charitable contributions for someone in your income range are also likely to trigger more scrutiny from an IRS agent.
What Does the IRS Letter or Notice I Received Mean?
Simply because you received a letter or other notice from the IRS doesn’t necessarily mean you will face an audit. The IRS sends letters to taxpayers for an array of reasons. These include:
- The IRS has adjusted your refund.
- The agency determined you have a balance due.
- The IRS is seeking additional information to validate your identity.
- The IRS needs an additional piece of information to process your return.
However, if you receive a notice from the IRS and you are unsure what to do, consult a tax attorney before you provide the IRS evidence that may later be used against you.
Contact an Experienced Tax Audit Lawyer in Roseville Today
The aggressive and strategic tax lawyers of the NewPoint Law Group can handle your tax audit concerns. We are experienced in negotiating with IRS auditors and examiners and protecting taxpayers from mistakes commonly made during the audit process. To schedule a confidential consultation with a member of our legal team call 1-800-358-0305 today or contact us online.