What Is a Tax Audit?
An IRS tax audit is a review of your tax return, income, and finances. During an audit, the IRS or state tax authority will try to determine if your reported income, deductions, and other information were accurate. There are several types of tax audits:
- Correspondence audit. The IRS communicates with you in writing.
- Field audit. An agent comes to your home or place of business and examines your records.
- Office audit. You have an in-person meeting with an agent at the IRS or state tax agency’s office.
Regardless of your type of audit, you should always take the IRS’s request seriously. It’s important to be aware that the IRS will never initiate an audit by calling you on the phone. Instead, you will receive a letter in the mail notifying you of its investigation and requesting certain information. If you get a phone call or email from someone demanding money or tax-related information, do not comply with this request. It is probably a scam. Instead, immediately call a tax lawyer. A Montana tax lawyer can help you determine whether you’re the subject of a real IRS audit.
During an audit, the IRS will ask you for detailed information about your finances, income, and tax liability. They might review your entire tax return or perform a more targeted audit that looks at a portion of your return.
Top Reasons You Might Get an IRS Audit Letter
Even honest, tax-paying people sometimes get audited. Don’t panic if you receive an IRS letter. They’re simply trying to confirm that your tax payments or returns were accurate—it doesn’t necessarily mean you’re in trouble.
While anyone can get audited, some situations increase the likelihood that you will be investigated, including the following:
- Business deductions that appear to relate to a hobby, rather than a legitimate business
- Claiming lavish food and entertainment write-offs for your business
- Home office and vehicle-related business expenses
- Miscalculations and other errors on your tax return
- Missing tax forms, such as a W-2 or Form 1099
- Offshore bank accounts, assets, or income
- Self-employment
- Someone reports your perceived violations to the IRS
- Substantial charitable donations, especially if you don’t have a history of philanthropy
- Sudden decreases in your earnings
- Unfiled or missing tax returns
None of these factors alone mean that you willfully violated federal or state tax laws. If you need help complying with the IRS’s requests or want insight into the audit process and your legal rights, call a tax lawyer immediately.
At Silverman Law Office, PLLC, we help individuals and businesses with their comprehensive tax law needs. Together, we can compile the necessary information for your audit, build legal strategies that protect your assets, and ensure your compliance with state and federal law. Schedule an appointment today to learn about our approach to tax audits.
You Have Legal Rights During a Tax Audit
When you work with an experienced tax lawyer, you’re ensuring that your rights are protected. The IRS doesn’t have unlimited powers to do whatever it pleases. You typically have the right to the following:
- Appeal the IRS or tax authority’s findings
- Courteous and professional treatment throughout the audit
- An explanation of why the IRS wants certain types of information and what they will do with it
- Information about the penalties you might face if you fail to comply with the IRS’s request
- Legal and professional assistance during the audit
- Request additional time to collect your evidence and tax information
Additionally, the IRS should protect your personal information during an audit. If the IRS is mistreating you or violating your rights, contact a Montana tax lawyer immediately. Mistakes and abuse do happen, and a tax lawyer can help you regain control and demand justice. He or she can also educate you about the confusing and intimidating audit process and calm your fears.
Silverman Law Office, PLLC guides its clients through tax audits and appeals in federal and state court. We also help them assess their eligibility for programs that can resolve a tax dispute, such as offers in compromise.
What Is an Offer in Compromise?
What if you owe the IRS or state tax authority back taxes? We may be able to assist you. Many states and the Internal Revenue Service may accept an “offer in compromise” of your outstanding tax liability for something less than you currently owe. Not everyone can fall within the guidelines of an offer in compromise. But we can help you explore the options available to get you or your business beyond its tax problems in as short a time as possible.
Schedule a Consultation With a Montana Tax Controversy Attorneys at Silverman Law Office, PLLC
We understand the wave of panic and concern that an IRS audit letter can cause. However, you don’t have to handle your tax issues on your own. Silverman Law Office, PLLC assists clients with a variety of business and personal tax issues, from the very simple to highly complex appeals and litigation. Our goal is to protect our client’s interests and resolve their IRS issues efficiently and fairly. To learn more about our services and approach to tax law, contact us today for a confidential evaluation and consultation.
