IRS Audit Notifications
Posted by Tax Man - 20/02/12 at 01:02 amAn IRS audit begins with a review of an individual or organizations reported income, expenses, and other financial information as it is outlined on the tax return that is filed on their behalf. A tax audit examines the information to verify that is was reported correctly according to the tax laws and indemnifications that are in effect during the return year.
IRS Audit Notifications
An individual will be contacted by mail or phone, as an official notification that a tax audit has been levied against their person or company. Included in this contact may be a list of the information required to reverse the audit and clear the person or company from owing additional money, fines or fees.
Tax Audits and How Your Are Chosen
Whenever a person or company files their tax returns, the information submitted in the required fields is lined up with other similar statements that fit their statistical categories as researched by the Internal Revenue Service. As soon as it is analyzed by an accountant assigned to the that particular field of returns, it is either okayed as is, or rejected for a complete tax audit. If it is set aside that is when contact is made. In addition, a varying lottery pick may choose a return because it meets a statistical formula.Other ways to be flagged for a tax audit is when your return does not match what your employer reported, or vice versa. Overt signs of red flags on a business partner or investors’ return may also prompt an individual or business being audited as well.
Responding to an IRS Audit
It is possible to respond to a tax audit solely by mail. If the IRS provides an individual with a list of items needed to clear the tax audit from contest, the tax payer can simply make copies of this paperwork and submit it to the IRS via mail. An IRS audit can also take place in person, by delivering the necessary documentation to your local IRS office, or at your place of business, by inviting an IRS agent onto the premises to review your paperwork on site.
Your Rights as a Tax Payer
Individuals have the right to be treated courteously and professional by all IRS agents, and are entitled to a right to privacy and confidentiality when dealing with tax issues. In addition, they have the right to know why the IRS is asking for the information they are requesting, and the right to know how they will use that information once obtained. Furthermore, each person has the right to have a third party representative oversee the audit, and the right to appeal any disagreements put forth by the agency, even in a court of law.
Concluding an IRS Audit
One of several conclusions are likely once the audit is over. There is either no change, as all the information requested was substantiated or approved. The tax audit individual realizes the error and agrees to the change in the return, as well as payment of any resulting monies. Lastly, if the tax payer disagrees with the changes, but understands that they are being assessed anyway.
