Friday, November 27, 2015

The Facts About the Typical Tax Audit

When you think about being audited by the IRS, you may think of men in suits coming to your home or office to scour your financial records. However, the truth is that most audits these days are conducted by mail. These are referred to as correspondence audits, and the IRS is simply looking for missing information or records confirming an income discrepancy.

In the event that you agree with what the IRS has told you, you simply mail a check to the address indicated on your audit form. You may also pay by debit or credit card through an IRS-approved tax payment system. If you don't agree with what the IRS has told you, and it is not uncommon for a mistake to have been made, you can contest the findings.

To do this, you will send in evidence of any payments you made, evidence that those you claimed to be dependents were dependents and business expenses that you deducted. In most cases, this documentation is enough to support your claims and resolve the case. However, you may hear word that the case is not resolved.

This is when you need to hire an attorney. While your case is pending, your unpaid balance may continue to accrue interest, which means that it is in your best interest to resolve an audit as quickly as possible. In some cases, your attorney may be able to get interest and penalties waived if it turns out that you do owe the IRS money.

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