IRS Audit

Alarming Audits: Unexpected IRS Audits And How To Deal With Them

Few things are as stressful for an individual or small business owner as the thought of an IRS tax audit. This article explains:

• When IRS audits can occur.
• Your rights and responsibilities when being audited by the IRS.
• What outcomes can occur from a tax audit for individuals and businesses.

What Prompts An IRS Audit For Individuals Or Business Owners?

The odds of getting randomly audited by the IRS are low; however, some things can trigger it. Things that increase your risk of an IRS audit or can lead directly to one include:

• Excessive expenses,
• Misclassification of employees,
• Excessive deductions or credits,
• Unreported income,
• Rounded numbers,
• And more.

Having a tax professional or attorney review your taxes can help identify issues that might be flagged by the IRS for audit.

What Are My Rights During An Audit By The IRS?

All taxpayers have the right to expect that any IRS inquiry, examination, or enforcement action will comply with the law. It must be no more intrusive than necessary, and all due process rights must be respected, including search and seizure protections and a collection due process hearing where applicable. If you are concerned that the IRS has ignored your rights, an attorney can help.

What Are My Responsibilities When Being Audited By The IRS?

It is important to cooperate with the IRS during an audit. You must gather the forms the IRS has requested, though you should always be sure to make copies, not give originals.

In addition, you should organize your paperwork and make sure the documents you have match up with the year that is under audit. If you realize you have misplaced certain records, immediately call and request that duplicates be sent to you.

What Are The Potential Outcomes Of My IRS Audit?

Once the IRS completes the examination, it may accept your return as filed or propose changes. You may be able to appeal that decision, especially with the help of a tax attorney. For more information on IRS Audits For Individuals And Business Owners, an initial consultation is your next best step.