Few tax situations are as frightening as having your returns singled out by the IRS. Fortunately, most audits can be fairly easy to resolve, sometimes by having your tax attorney mail additional documentation to an agent. Understanding why returns are selected and what to do if you receive an IRS notice will alleviate stress and help you resolve the situation as quickly as possible.
Why Are Returns Selected for Audit?
Every year, the IRS selects just over one million returns for audit—that’s approximately 0.5% of all taxpayers. In most cases, audits are triggered by omissions, common mistakes, or discrepancies between your returns and those of other businesses or taxpayers. The audit of a business associate might also trigger an audit of your company or you could be selected at random by a computer program.
What Does an Audit Mean?
In general, an audit is a review of your financial records to ensure your tax return is complete and accurate. While you might have visions of a stern IRS agent going through years of receipts and earning statements, in reality, most audits are conducted through the mail. Once the auditor receives the documentation they’ve asked for, they’ll either approve your return or ask you to file a new one with requested amendments.
What Steps Should You Take if You’re Being Audited?
The first step in managing an audit is to read the IRS notice carefully. They might only be asking for receipts or invoices or they may have questions about a payment. A tax attorney can help explain exactly what the IRS is looking for, identify what documents to collect, and even represent you during the process. If you disagree with the auditor’s conclusion, they can also file an appeal on your behalf.
For over 25 years, taxpayers throughout Ohio’s Knox, Licking, Muskingum, and Franklin counties have relied on Vernau Law for effective representation and insightful legal advice. If you’ve been selected for an audit, their tax attorneys will guide you through the intimidating process and work to achieve the most favorable outcome. To speak with a tax attorney and schedule a consultation, visit their website now or call (740) 587-2637.