An IRS tax audit can be a big issue for you and your business if you have some tax problems.  A few important tax problems like IRS problems and Payroll tax problems can bring the attention of IRS tax audits.

So, what to do if you get audited?  Unfortunately, some unlucky people end up in getting audited.  Here are a few suggestions from IRS Audit Group, Newport Beach.

Seventy percent of audits are just a letter asking for more information about your tax returns, and you’re asked to mail back forms proving your income or deductions.  In other cases, you’ll get an invitation to meet with an agent to discuss your tax forms.  Most of the time the letter you get in the mail is just a simple request for information – the IRS just wants you to mail in your 1099 form, for instance, or they want to see receipts for the business meals you deducted.

If you’re trying to beat an IRS audit without a professional tax relief service, it is like committing suicide as the chance of winning the battle against IRS audit is very low.  There are more chances of a big crash in the battle.

Well there’s no need to panic, but there are certain steps you should take.

Don’t ignore the letter, ignoring the IRS is the worst possible thing you can do.  The situation won’t go away.

You’ll need to grant power of attorney to your audit representative, to let them handle everything while you stay home or doing your business peacefully.

The professional tax representation services form  IRS Audit Group, Newport Beach helps you in different issues like back taxes, unfiled tax returns, IRS wage garnishment, IRS bank levy etc.  The tax matters are very technical and need specialized technical knowledge about various tax issues.  The experts at IRS Audit Group, Newport Beach can get you IRS tax relief if you have any tax problems with back taxes, IRS tax debt, late filing, tax penalties etc.  They can bring you substantial tax relief with their expertise and experience.

That’s why you need not be panic if you can’t find the information they’re looking for, the Tax professional can advise you on your next move.  Tax professional s can help you with analyzing issues, finding appropriate solutions which would result in permanent resolution to your tax problem, thus peace of mind.

Our IRS Audit Group experts can help you to do better against an IRS audit.   IRS Audit Group, Newport Beach is a team of professionals experienced in the field of IRS tax controversy, tax problem resolution experts consist of tax attorneys, EAs (Enrolled Tax Agent Experts), CPAs.  They are experts and they already have the experience of handling various tax issues for different clients.  Handling an IRS tax audit is very simple for them.

IRS Audit Group located in Newport Beach and Beverly Hills, we also have an office in Greater Los Angeles with  15 plus years experience in representing to IRS.

Before knowing the tips, let us understand what exactly IRS is and what they do? The IRS stands for “Internal Revenue Service” is a government agency of the Federal Government, and its main duty is to collect taxes.  Apart from this, the IRS performs various other related duties.

The IRS ensures that they process all the returns filed each year in order to improve, taxes payments, and issues refunds owed to taxpayers.  Thus, if your return has been set aside for assessment then you need to know tips in order to endure the proper follow up of IRS tax audit.  IRS Audit Group – Beverley Hills has compiled five tips for you now.

Featured article – Tax Audits: Understanding IRS and State Tax Audits

Why am I being audited?

If you are selected for IRS tax audit it does not mean there is a problem.  The IRS compares your tax returns against “norms” by computer screening.  But don’t delay to respond.  Now, here are five tips on IRS tax audit as suggested by IRS Audit Group – Beverley Hills.

1. Responding to the Notice

First and foremost you should not ignore the notice letter instead respond to it within the given time.  If you take the audit notification letter for granted then you might end up paying more money than what was actually required.

If the audit notification letter specifies a field officer then you must call and contact them rather than arranging an office auditor in the home or place of business. If you are a resident of Beverley Hills, then you can take the service of IRS Audit Group.

Featured article: IRS Audit – How far back can you be audited?

2. Enquire the Reason for the Audit

The IRS must and should mention the reason in the notification letter as to why you are receiving this letter, and if you don’t really understand the script then you have every right for seeking clarifications.

You should be very careful about how you are asking questions and avoid all the situations that might bring up some other issue as they would be very precise in your words.  If something pops up which is outside the scope then they might look into that as well.

3. Organize your documents well

Remember that the auditor from the IRS is just a person hired to perform that job and if you present all the necessary documents then their job will be easy and they need not go out to find a problem.  So, as soon as you receive the notification letter you need to organize all the paperwork which is relevant to your case and there are some bills or documents which might come handy, they are:
a) Earning statements like W-2 or 1099
b) Medical Bills
c) Internet bill receipts, etc.

4. Hire a Representative

Sometimes when having a discussion with the IRS auditor you might get frustrated and it might end up in an angry manner so it is always better to hire a representative to talk on behalf of you to continue the talk in a professional manner and this could be a benefit.
In many cases, you can complete the form and your representative can attend the audit meeting for you.  If you are a resident of Beverley Hills, please be in touch with IRS Audit Group – Beverley Hills

5. Know your rights

As an individual taxpayer, you have every right to ask questions during the trial.  So, while you disagree with certain statements put forward by the auditor, you must know your rights, the process and the law behind the deductions.  Becoming more aware of the rules and regulations will make it easier for you to complete the process.

The team at IRS Audit Group – Beverley Hills is available for your services at any time and please be in touch with IRS Audit Group – Beverley Hills.

How Far Back Can the IRS Audit?

Wondering how far back the IRS can audit you? The Internal Revenue Code, Section 6501, provides the statute of limitations. A statute of limitation is a law that provides a maximum time in which the taxpayer and the IRS must, “initiate legal proceedings from the date of an alleged offense.” Therefore, how far back the IRS can audit you depends on the circumstances of the tax return.

According to the U.S. government, the IRS can request for returns filed within the last three years in an audit. Though the IRS typically does not audit for documents older than 3 years, if there is a significant error upon filing past returns, it is possible for the IRS asking for necessary documents.

The statute of limitations starts on the original due date of the tax return. The statute of limitations starts on April 15th of the year that the tax return was due. So, if you filed your 2013 tax return on April 15, 2014, then the IRS would have time until April 15, 2017, to audit it.  However, if you had requested an automatic extension and filed tax return on Oct. 15, 2014 then the IRS still has time until Oct. 15, 2017, to audit your return and assess any additional tax and penalties due.

Even if you do your best with your taxes, taxes are horribly complex, and you may be asked for more information on IRS collection. Make sure you keep all records to stay ready for any requests by the IRS. Here are a few tips form IRS Audit Group about tax laws that sets a time limit on IRS tax audits, and how far back the IRS can audit.

How far back can the IRS audit you?

Below are the three different time frames and descriptions of when each applies for the IRS to audit your tax return according to the analysis done by tax law professionals at IRS Audit Group:

3 Year Period:

This is the standard amount of time that the IRS has to legally audit tax returns.  This is the time period that applies if you do not fall into any of the two categories listed below.

6 Year Period:

If the income on the tax return was understated income by 25 percent or more, the statute of limitations to audit the return can be extended by another 3 years.  It is worth noting that the IRS doesn’t consider any amount as omitted from gross income if you disclose it in the tax return, or in a statement attached to it.

Unlimited Time Period

When there is a massive amount of tax understatement, the IRS legally has six years to confront the return. However, there are three exceptions which extend it to an unlimited time period.

In the event of one of the three exceptions, the IRS has an unlimited amount of time to audit and charge penalties and interest rates. Specifically, you may be subject to accumulate taxes, penalties and interest without any time limitation if one of the three exceptions apply:

1.      The Taxpayer Filed a false tax return,
2.      The Taxpayer attempted to illegally evade paying taxes
3.      The Taxpayer Failed to file a tax return.

How Long Does IRS Audit Process Take?

An audit may seem like it takes an eternity. For some people, an audit will take longer than others. The IRS cannot determine exactly how long an audit will take; however, the IRS, too, is in favor of a speedy process. In other words, the IRS would like to get the procedure completed as soon as possible. Numerous items can prolong an audit — we suggest visiting the IRS website for a thorough elaboration, though, IAG has created a quick analysis on what may extend an audit process time.

Delaying by not providing

Not providing the IRS with the documents in time can lead to further issues with the IRS, and prolonging the audit process time. It is not recommended to delay the documentation simply buy some time.

Other reasons for a delay

An audit can likely lead to disagreements. And sometimes you may not be able to meet on time because of conflicting schedules. These conflicts are to be expected, and the IRS does attempt to work with the auditees to try and make sure that it runs smoothly.

Causing a delay is not a wise idea. This can upset the auditor, and one of the most important things to remember during an audit is that the IRS is a bold collection agency. They can freeze your accounts; garnish your paychecks; and take away property and assets. With all of the power they wield, to not delay. Instead, speak to a certified tax professional to know more about an extension period.

Disagreement On How Far Back The IRS Can Audit

Disagreements are normal, and it is likely that the auditee and the auditor may not agree on certain aspects of a return or findings. IRS Audit Group has tips on how to treat a disagreement assertively.

How to handle a disagreement

If you do not agree with the findings in an IRS audit, one can request mediation and to speak with an IRS manager. It is even possible to appeal the findings. However, this may only be possible if it is still within the statute of limitations because, as mentioned above in How Far Back Can the IRS Audit?, it can depend on how far back the IRS can audit you. But first, IRS Audit Group we advise to consult with a tax attorney beforehand. To learn more, speak to a tax attorney or consultant at IRS Audit Group.

It can get worse

What happens if you do not comply with the IRS’ notices? The problem remains, and interests and penalties may accrue — in short, a delay. Disagreements in how to handle a certain deduction or how to handle incoming funds can delay things further. It is possible that these disagreements would require the auditee and the IRS to go to tax court. We highly recommend to not resort to these methods, or go to tax court without proper representation and consultation. Regardless, as a taxpayer or auditee, it is imperative to know and fully understand Your Taxpayer Rights.

Learn More

If you are still unsure, do not hesitate to reach out for help. If you have more questions regarding taxes, and IRS audits, contact us. Our knowledgeable operators will connect you to a competent tax attorney at IRS Audit Group offices in Beverly Hills or Newport Beach. Regardless the tax situation, we will help resolve your tax matters assertively, efficiently, and responsibly. We serve customers nationwide.

In general, no one really wants to be audited by the Internal Revenue Service (IRS) and to be frank, it’s a problem. There are chances of getting audited as the income level increases as well. It is better to play safe to avoid the burden and stress of an IRS audit.

Here is a summary of the reasons for getting audited

– Annual income
– Exclusion of income while filing returns
– Deductions claimed based on total income

In order to stay out of this IRS auditing, it is prudent to look into a few red flags (warning signs) which you take note of as follows;

Earning income from multiple sources

When you have multiple sources of income, say you are a freelancer, it may turn out for you hard to maintain all of the income year earned, and the much more likely you’re to leave out a payment. Any organization you work for is required to send the IRS copies of all 1099s and W-2 forms you receive. If the income you record doesn’t line up with those forms, that mismatch IRS will trigger at least a letter audit.
Unreported Income
Unreported income is a huge deal to the IRS. According to a recent IRS report, U.S loses hundreds of billions per year in taxes due to unreported income. So if you fail to showcase those earnings, the IRS will ask explanations.

Running own business

The IRS always have an impression that they can find more the unpaid tax from those who run own business. It’s always better to keep a good track of records if you are running own business. It is advisable to maintain in-depth reports, which consists of business associated receipts regarding purchase etc. in a good categorized manner is a must when filing the returns.

Foreign Accounts & Assets

If you keep the overseas account, it could certainly raise questions in the minds of IRS specialists. Also, the IRS is intensely focused on any individuals who hold an offshore bank or any kind of security accounts. Also, the residents and citizens of U.S who hold any foreign assets are required to report it to the IRS on form 8938.

Involving in huge money transactions

The IRS obtains many reports concerning the excess amount of currency transactions via bank deposits and withdrawals, casino visits etc. Even many banks also fill out an IRS reporting form for cash transactions of over $5,000. It is advisable to take note of these transactions and be prepared to give an explanation in the case asked for.

Hiding the taxable income

If you file a return which doesn’t match up with the records sent to the IRS by your employer, you are most likely to be called into account as the IRS gets all the copies such as 1098’s, 1099’s and W-2’s. Hence, it’s always better to file a return on all your taxable income.

Corporate deductions and Personal expenditures

It is always better to keep corporate and personal expenditures at a distance as much as possible because the IRS experts will have all the particulars regarding your family members and are greatly skilled to check the significant purchases made immediately prior to birth dates or anniversaries.