IRS Audit. What you need to know?

Just when you thought you were done with taxes, the IRS sends a letter informing you that an audit has been initiated.

Certain audits won't result in a higher tax bill from the Internal Revenue Service. Nonetheless, you can become anxious if you receive a letter. Is there going to be a significant fine? To what extent is the IRS privy to information about your life that you are unaware of?

You probably didn't intentionally do anything improper. National Taxpayer Advocate for the IRS's Taxpayer Advocate Program Erin Collins has stated that the IRS is not out to punish people for honest mistakes.

The Internal Revenue Service is well aware that tax day is a bittersweet one for many and that some taxpayers will go to great lengths to avoid forking over their dues. This is the main reason why the IRS investigates tax returns submitted by individuals and corporations.

1. Key Points

• What is an IRS audit?
• IRS method of communication
• How to deal with IRS Audit.

2. Tax audit definition

If the Internal Revenue Service suspects that you haven't paid all of the taxes that you owe, they may request an audit of your tax return. So, you may need to submit supporting documents, such as receipts, to verify that you are qualified for a credit or deduction you claimed on your tax return.

3.Where do IRS audit letters come from?

The Internal Revenue Service will always communicate with you by sending a letter in the mail. You will never be contacted by phone or e-mail in the event of an audit being conducted. If you are contacted in this manner in the beginning, the transaction is probably fake. IRS  letter will provide you with all of the information that you want regarding your audit, including the date by which you are required to take action.

After that, the vast majority of audits will continue to be carried out by postal correspondences; nevertheless, a tiny number of audits will require you to speak with an IRS agent either in person or over the phone in order to amend your return.

4.What does an IRS audit letter look like?

This is an example of the kind of letter that the Internal Revenue Service (IRS) could send to a taxpayer to inform them that their taxes are being audited. The letter will provide you with all of the information that you want on your audit, including the date by which you are required to take action.

It is essential that you check the accuracy of all of your personal information, including your Social Security number, address, and contact information.

You can register an online account with the Internal Revenue Service (IRS), if you haven't done so previously, and use it to examine digital copies of notices that have been sent to you.

5.How many years back can you be audited?

According to the Internal Revenue Service (IRS), an audit that the IRS performs on you may include returns that you have filed during the past three years.

"In the event that we find a significant mistake, we might tack on some additional years. In most cases, we don't look further back than the previous six years "according to a post made on the website of the organization. "The Internal Revenue Service makes every effort to conduct audits of tax returns as quickly as feasible after they have been submitted. As a result, the majority of audits will focus on returns that have been submitted during the last two years."

6. What should you do if you get audited? 

The initial step should be to "really open the letter," as this is the most important step. It's possible that a lot of individuals will be tempted to throw them away because they anticipate that it will contain unfavorable information. Ignoring correspondence from the government is the worst thing that you can do as a taxpayer. You need to get back to us as soon as possible, either in writing or by giving us a call. In most cases, the letter you get from the Internal Revenue Service (IRS) will tell you how many days you have to answer to their inquiry. You also have the option to seek additional time to respond.

Failure to answer may result in the assessment of further penalties and interest. It is also possible that you will lose the right to appeal the fees that the IRS thinks you owe to them. It is also possible that it will exacerbate the situation and lead to a legal case.

Once an audit has been initiated, it is vital that you cooperate with the IRS auditor and establish a positive working relationship with them. Get the help of a qualified professional to assist you and handle your situation.

Contact Surya Padhi at Sure Financials for any question and clarification. Surya Padhi is an expert who keeps current on tax law changes as well as a member of the National Association of Tax Professionals National Association of Tax Professionals (NATP) and  New Homepage - National Association of Enrolled Agents (naea.org). Visit Welcome | Sure Financials & Tax Services, LLC (surefintaxsvs.com) for more information and contact us by calling +1908.300.9193.