IRS Tax Audits Are The Rise
None of us can be certain the IRS won’t call after taxes have been filed. The fact is, audits are going up every year. The IRS wants to improve ways to catch delinquent taxpayers. $400 million is set aside for IRS enforcement of tax in 2010. Notifications of audits are sent out eighteen months following the filing date. An audit this time round is due to your 2008 tax returns.
It is to your benefit to take action as soon as you are aware of a tax difficulty. You have thirty days following a first notification to respond to the IRS. If you don’t reply within the thirty days, substantial tax penalties will be issued to your account by the IRS collections department. In the event that the thirty day grace period is insufficient time to sort out your affairs, apply for a postponement. Normally, the IRS will be amenable if you have to find relevant records.
An audit can become complicated for the average taxpayer. It does help your case to have the assistance of a certified tax professional to guide you through all the twists, turns and demands of an IRS audit. They may request complex documentation that needs specialized help. In the case of a person to person meeting with the IRS the tax professional will represent your case and avoid unnecessary mistakes.
It is important to understand that an in-person meeting with the IRS for the purpose of an audit is like being in a court of law. ‘Anything you say can and will be used against you in a court of law’- this is not an exaggeration and you may even end up being accused. It’s advisable not to say anything and leave it to the tax professional representing you.
If you are not satisfied with the auditor’s conclusion, you may ask to speak with their supervisor and request an appeal. The IRS will comply only if they see they can’t win in court. However, there is no point in using the legal system for an amount under $10,000.
