This could be one of the most frustrating times of your life if you have a state, federal, or corporate tax issue. If you’re like the majority of individuals, you painstakingly completed your tax documents and took the required security measures to lessen the possibility of an audit. The last thing you anticipated was probably receiving a notice from the IRS or the state of California.
The best course of action is to understand the audit process, why your return was audited, your rights and obligations, and your options for appealing the results. If you find yourself in this situation, hiring any Roseville Tax Law Attorney is better.
What is Field Audit?
A field audit is a personal inspection carried out at your business location or the office of your tax advisor. This is the most thorough kind of IRS audit, frequently entailing careful scrutiny of numerous items on a return. You will receive a list of the supporting documents from the revenue agent, which you must have on hand for review.
What You Should Know to Survive an IRS Audit
These are some important facts you should keep in mind.
Know your legal rights
During an audit, you are entitled to
- A description of the auditing procedure
- Attorney, CPA, or enrolled agent representation
- Make extra deduction claims that you did not make in your initial tax return.
- Consult the national office of the IRS for advice on any particular technical issues that come up throughout the audit.
An audit is not a charge of violation
There is no charge brought against you when your return is audited. Simply put, the IRS audit objectively evaluates your tax return to ascertain its accuracy. You must prove that you declared all of your income and qualified for all the credits, deductions, and exemptions listed on your return.
There is a timeline involved as well. Unless there is tax fraud or a significant understatement of income, the IRS must typically finish an audit within three years of when the tax return was submitted.
Remember the following tips
- Being honest is important.
- Request a postponement if you need more time to organise your records.
- Bring only the documents listed in the IRS notice to the audit.
- Bring everything you need. The agent won’t waste time performing a more thorough audit if your records support the items listed on your return.
- Don’t give the IRS agent any information voluntarily. Your representative should answer the queries from the agent if you have one.
- Maintain thorough records of all the information you give the agent, as well as any questions they may ask.
- If you feel that the agent is treating you unfairly, ask to meet with the auditor’s supervisor.
- You will receive an examination report from the auditor. Call the auditor with any queries or issues if you don’t agree with it or don’t understand it.
- If you can’t come to an agreement over the tax liability, get together to try to find a middle ground.
If you disagree with the audit outcome, you may appeal
If you concur with the auditor’s conclusions, you’ll fill out some paperwork and make the necessary payments. If you disagree, you can discuss the disputed issues informally with the auditor’s supervisor or through alternative dispute resolution (ADR) mediation. You can submit an appeal with the IRS Appeals Office, which is separate from the regional office that carried out the audit if that doesn’t fix the issue. Within 30 days of getting the audit report, send an email of protest to the IRS.
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