What is the Auditing of Tax?
Auditing of tax is a formal examination that is conducted by the IRS to verify information or to uncover fraud and inaccurate tax returns.
IRS selects tax returns to examine both randomly and intentionally. When the IRS is selected randomly, the IRS simply takes a closer look to assure that all the information is accurate. It intentionally audits certain tax returns if there are any issues or frauds in reporting the tax return.
Auditing of Tax are separated into 4 types:
Correspondence Audit: The least serious type of tax auditing. Correspondence Audit refers to the IRS request for additional information to verify the details or accuracy of the tax return.
Office Audit: It refers to the in-person interview with an IRS manager to process the audit. To avoid making statements that can be used against you, it is highly advisable to consult with an attorney or a tax professional before attending the interview.
Field Audit: the most serious type of audit as the IRS agents would visit you at home or business. They might ask you to see things that are related to the tax that has been reported.
Random Audit: It is made without any particular reason. The IRS auditor will review the entire tax return to ensure the information was entered correctly.
How to handle the Auditing Of Tax?
For all kinds of audits, the IRS begins the auditing process by sending a notification letter to the taxpayer. If the taxpayer has received a notification letter then they must read the letter carefully. The letter might consist of some important information regarding why your tax return is being examined, specific steps to follow, and the deadline to reply.
Get Prepared For Auditing Of Tax
Tax audits can be simple and some of them can be extremely complicated. Auditing of Tax representation is necessary only if you are charged with any penalties or possible crime. Before responding to the IRS, one should first analyze the status of their tax return and determine what kind of steps should be taken to solve the matter. If you have received a tax audit notification, you are best off contacting an experienced tax lawyer near you.
