Roseville Tax Audit Attorney
Filing taxes properly each year can sometimes be confusing and overwhelming, but it is necessary. One thing that can and does go hand in hand with filing taxes is the possibility of being selected for an IRS audit. Receiving this notification can be nerve-wracking and overwhelming, but it does not automatically mean something is wrong. Individuals or businesses are often selected for audits randomly each year. Regardless of the circumstances, an experienced tax attorney in Roseville, CA, can ensure that the process is completed efficiently and effectively.
What Is an IRS Tax Audit?
Each year a selection of individuals and businesses are selected, often at random, to be audited by the Internal Revenue Service. An audit is a process undertaken by the IRS that is essentially a deep dive into the taxes and information of the selected people. An audit that is completed by the IRS is intended to ensure that all earnings and accounts are being reported properly for tax purposes. The process of being audited by the IRS can be time-consuming and frustrating, but working with an expert tax attorney can make it easier to manage.
Reasons for an Individual IRS Audit
There are several key reasons that an individual or business may be selected for an audit by the IRS. It is important to note that being selected for an IRS audit does not immediately show that the tax filing is fully incorrect, it is simply a way to ensure all necessary income is filed correctly.
A few of the most common reasons for an audit are the following:
- Random Selection – This is most often done through a computer program. Similar tax filings are examined to ensure that they have all been filed properly. If any part of a tax filing seems out of place, it may be randomly selected for an audit.
- Related Audits – Some individuals or businesses may be audited because they are associated with another person, business, or corporation that is being audited. If an individual is selected for an audit, any business partners they have may also be selected, depending on how involved their financial practices are.
- Tax Credit Issues – Unlike the others, this type of audit most often happens when something is incorrect. An individual or business may improperly file for a child tax credit, premium tax credit, or other credit, which could trigger an audit.
Reasons for a Business IRS Audit
Business audits can also be triggered for any number of reasons. These audits are very intense and could lead to significant penalties for a business. Some of the common reasons for a business being audited are:
- A business that keeps multiple sets of books.
- An associate is being audited, and the business gets pulled in.
- Reclassifying workers.
- Business losses are being deducted.
Regardless of the circumstances of the audit, each one will follow the same general structure and process to be completed. Those who have been selected for an audit will receive a written notification with further instructions.
What To Do If You Get Audited
If you are selected for an IRS audit, the most important thing you can do is to follow the steps that are provided to you by the IRS. Notifications are only sent by mail, so if you receive a phone call or email regarding an audit, it is fraudulent. They may request specific documents or an in-person interview to go over your records and ensure they are correct.
If the audit has to do with an improperly filed credit, such as a child tax credit, the IRS will request a few key documents. First is proof of relationship, which could be satisfied with a birth certificate or school document for the child in question. They will also request proof of residency, such as school records, to prove that the child lives in the home of the person who claimed them as a dependent for over half the year. There may be other documents requested that are specific to the case at hand. It is important to follow the instructions that are provided in the notification letter.
It is also helpful to contact an experienced tax attorney. If you are overwhelmed by the process or unsure of how to move forward, they can offer guidance and support to ensure the audit is completed successfully.
The Steps of an IRS Audit
Audits that the IRS conducts will follow the same general pattern. It is beneficial to be aware of this so that the process will be more familiar if you are selected for an audit. An IRS audit will be conducted in the following way:
- Notifications of the audit will be sent out by mail.
- The notification letter will request specific documentation. This often includes Proof of Relationship and Proof of Residency. Other documents may also be requested, depending on the specifics of each case.
- The necessary documentation will be provided to the correct people. The initial notification letter will provide specific instructions for where to submit documents.
- The IRS will review the documents. This will either be completed by mail or with an in-person interview.
- Once all documents and records have been reviewed, they will move forward. There could be no change, a refund for overpayment, or a requirement to pay back taxes.
While the process of an IRS audit is relatively simple, it can still feel overwhelming at times. An expert tax attorney can provide support and peace of mind as you navigate it.
How a Roseville Tax Audit Lawyer Can Help
A Roseville, CA tax attorney is a great resource for anyone facing an IRS audit. They have the expertise and experience necessary to help their clients navigate an audit successfully. The right attorney will provide insight, resources, and guidance throughout the audit process.
They will know how to gather and organize the proper documents to ensure that there are no delays in the auditing process. They can guide their clients through what steps to take as records are submitted and reviewed so that the IRS receives all of the correct information to ensure the audit is correct. An experienced tax attorney will also know how to negotiate a payment plan for their clients, when necessary, that is affordable and effective.
Q: Should I Hire a Lawyer for an IRS Audit?
A: You are not required to work with an attorney if you are selected for an IRS audit. You can work through the process yourself in most cases. It is recommended that you work with a tax attorney if you have been selected for an audit, however. They have the necessary experience and expertise to guide you through the process successfully. It will be especially important to work with an experienced and qualified tax attorney if you are accused of a crime like evading your taxes.
Q: Can a Tax Attorney Negotiate With the IRS?
A: Yes, an experienced tax attorney will be able to negotiate with the IRS in certain circumstances. This will be particularly important if their client needs any sort of payment plan to ensure that any missed taxes are paid back. An experienced, expert tax attorney will work with their client to figure out what they would realistically be able to pay and still survive. Once that has been determined, they will work with the IRS to negotiate an effective payment plan that benefits their client as well as the IRS.
Q: What Questions Should I Ask My Tax Attorney?
A: If you are dealing with an IRS audit, it is important that you stay as informed as possible. An experienced tax attorney can help keep you informed and prepared throughout the entire process. They will likely provide as much of the necessary information as possible themselves, but you can also ask any questions you have. Some important topics to discuss are what documentation you need to provide, how long the process may take, what events or filings may have triggered the audit, and what the audit process is like.
Q: How Much Does a Tax Attorney Cost in California?
A: There is no set amount that a tax attorney in California may charge. Attorneys are able to set their own fees in most cases, so there are several factors that will come into play. A tax attorney with a good education, specialized training, years of experience, and the resources to handle difficult cases may charge a higher fee. In most cases, individuals who work with a California tax attorney can expect to pay several hundred dollars per hour.
Facing an IRS audit can be daunting. All of the necessary paperwork and documentation for the audit must be gathered, organized, and shared properly. Also, there is the potential for significant financial loss if any part of the audit is negative. It is important to have the best support during the audit process.
An expert tax attorney can help their client navigate the audit process and provide them with the necessary resources and guidance from beginning to end. They will also have the expertise to negotiate an appropriate payment plan if needed. If you or your business are facing an IRS audit, contact the team at Coggins Law today for assistance.