What You Need To Know About IRS Audit Representation
November 24, 2018 in Tax Resolution Help
Most taxpayers have a tendency to panic when they receive a letter from the Internal Revenue Service (IRS). Upon receiving an IRS notice, they get all panicky and unsettled as they try to recall everything they did with the financial documents from the previous year. They dread the oncoming assessment with a possibility of paying more taxes and other penalties they may be charged for overlooking mistakes on their tax returns. All In all, there is a certain anxiety that surrounds any involvement with the IRS. However, you can simply let go, and let an IRS Audit Representation specialist take care of you throughout the auditing process.
Why Did I Get An Audit Notice From The IRS?
The IRS doesn’t conduct audits to cause uneasiness, panic or harm to the taxpayer. The purpose for an IRS audit is to make sure the taxpayers’ numbers are congruent with what is filed in the tax returns. The audit is conducted with the aim to reduce the tax gap – that is, the difference between what you owe the IRS and what the IRS actually received. You might receive an audit notice randomly, while in some cases, on grounds of suspicious activity. Among the reasons that catch the attention of the IRS include, but not limited to:
- Rounding off your figures too conspicuously (neat numbers)
Your financial documents and your form 1040 may contain numbers that most likely will not be in simple intervals. In such an instance, you should avoid making approximations, but if you must, round the figure to the nearest dollar. An example you can use is: If you work as an artist and you claim $365.25 as your business expense, round it off to $365, not $400. If not, the IRS might raise suspicion and ask you for proof.
- Mathematical errors
While preparing your taxes, check your numbers carefully to make sure that there are no errors. Or better yet, you can even hire a professional to prepare your taxes for you.
- Too many reported losses
If you are self-employed and work from a home office or run your own business, avoid filing your personal expenses as business expenses. Reporting too many losses may raise an alarm on how you’re able to keep your business running. In order to avoid any pitfalls with the IRS, keep your report clean by only deducting the important and actual expense you incurred during business operations. It might be tempting to claim underserved deductions, but you should know that the IRS is head first and is aware that those deductions are common and fraudulent.
What an IRS Audit Representative Does For You
An IRS audit representative can help you settle disputes with the IRS in the following ways:
- Compile necessary documents for the audit
- Protect your rights as a taxpayer
- Ensure you don’t pay more than you owe
- Acts as communication medium between you and the IRS
- Will defend and appeal an audit where applicable
When Do I Need IRS Audit Representation?
It is important to know that getting representation is in no way an indication that you did something wrong. Getting representation saves you time and alleviate the pressure of having to deal with the IRS. Not only will you gain a better legal understanding of the process, but representation ensures that you don’t pay anything above what you owe. For more information, contact Tax Defense Partners today!