An unavoidable mandate for American citizens is in fulfilling their tax mandates both at individual levels and as a business. Nationally, the Internal Revenue Service has the mandate of ensuring that all taxpayers abide by the set requirements and continuously present the right returns. As such, from time to time, the agency will reach out to taxpayers through the much-dreaded auditing for verification of their fillings. Unlike the popular perception among Americans, receiving an audit letter from the IRS does not in any way imply criminal activities. It is a normal process run by the agency that seeks to evaluate the financial data they have received and the accuracy of the presented paperwork. Many at times, the taxpayers chosen for auditing are selected through a statistical formula that is based on the norms expected when filing returns.
The random audit selection by IRS means that anyone can be subjected to an audit from the agency as it is their mandate to oversight all taxpayers. Besides the random selection, there are automatic red flags that arise from specific activities, transactions, or related examinations that equally result in audit queries. As such, this is a process that sends shivers downs the spine of many people as there are harsh penalties for failure to satisfy all tax obligations. It becomes worse considering that there are instances, such as tax evasions that are handled as criminal liability. Overly, regardless of the reason why one has to undergo an audit, it is essential to have the right approach to the process as it can quickly become complicated.
Studies show that IRS audits are considered to be extremely stressful by Americans, and many would rather do anything else to avoid the process. However, while these audits are far from fun, they never have to be traumatic experiences. The right preparation when facing an IRS tax audit, therefore, makes all the difference as it allows you to face one of the worst fears in the nation with confidence. Primarily, there are three types of audits in the USA, namely correspondence audit, office audit, and field audit. In some instances, one might even be subject to the Taxpayer Compliance Measurement Program Audit that is the most extensive audit. Under this audit, every aspect has to be substantiated, including verification of personal documents such as birth and marriage certificates. On the brighter side, this audit is rare and is majorly used to write the computer scoring program to be implemented by the IRS.
As an individual facing an IRS tax audit, it is crucial to understand that this is a journey that you cannot complete alone. Regardless of how confident you are about the accuracy of your tax fillings over the years, there is always the most unlikely loophole that can raise more questions. To avoid taking risks during this legal process that can have lots of implications, the right step is relying on seasoned professionals. Instead of panicking and letting everyone know the IRS is on your back, the most appropriate solution is seeking the services of a tax attorney. This is because these professionals give you double advantages as they have legal knowledge and authority to represent you. On the other hand, they also have mastery of taxations and will play a critical role in keeping you safe from the many IRS traps.
Generally, the IRS audit notification and summons are always centered on specific areas that the tax man wants better clarity about. The IRS tax attorney will carefully go through the audit notification and provide a roadmap to handling the specific requirements. For all tax audits, verification documents are always needed, and a seasoned attorney will ensure that your financial records are in order. Unlike your CPA accountant, the best part about relying on legal experts is that they have a special attorney-client privilege. As such, whether you know you cheated on taxes or fudged the numbers, this is a partner that can handle your case with confidentiality. This is because while the IRS can decide to subpoena an accountant, a tax lawyer is protected and can never become a state witness. Finally and most importantly, is the fact that an experienced tax attorney understands IRS auditors. The professionals will, therefore, have the perfect techniques to mitigate you from civil or criminal consequences.