Tax Audits
Taxes are by no means very fun, especially if you are the subject of an audit. Audits can range from small honest mistakes that have to be backed up with documentation to the large-scale seriousness of tax fraud.
If you receive an official envelope from the IRS, don’t panic. There are three kinds of audits. Most audits fall into the first category. The IRS will contact you by letter asking for more information on a couple of simple items. These are generally not serious and once you provide the information requested the situation is settled. They may contact you again if their findings show that you owe more money.
With more serious inquiries you will need to meet with an IRS examiner at the nearest district office. They will examine your return more closely. Only provide them with the information they request and don’t volunteer any other information not specifically related to their questions. It may invoke further unnecessary investigations.
The final type of audit is a field audit, where an IRS agent conducts an investigation at the taxpayer’s home or business. These are generally reserved for people in the higher tax bracket. The taxpayer will be subject to a lifestyle audit where everything from their house and neighborhood to the type of car they drive is examined to determine if it applies to the taxed income that the individual pays.
If you have been tapped for any type of audit it is important to act immediately. It is a good idea to hire a professional to help you with the legalities of an already confusing subject. If you hired a professional to do your taxes in the first place, those responsible will generally handle everything for you. They will ask you to provide them with information and then take it from there.
