We Can Help You Deal With an Audit or Request a Reconsideration
Receiving an IRS tax audit has to be up there as one of the most frightening and nerve-wracking things you can experience. The IRS may be scrutinizing a certain line item or deduction, or your tax return could have been selected at random. You simply won’t know. It’s important not to defraud the IRS because in and of itself is a prosecutable offense and the last thing you want to do is compound one problem on top of another.
If there are discrepancies on your tax return, an Omaha NE IRS tax audit lawyer at Midwest Tax Relief can advise you on how to proceed. Contact us today to learn more about IRS tax audits, IRS audit reconsiderations, and how we can help.
What Is the Timeline for an IRS Tax Audit?
The IRS has three years from the date of filing to assess additional tax. However, if there was a substantial omission (25% or greater) they have six years. If you failed to file at all or the IRS is alleging fraud or tax evasion, then there is no statute of limitations on when they can investigate. If you are audited, you should assume the statute of limitations will not protect you.
Understanding How IRS Tax Audits Work
An audit is not the same as being charged with a crime. Instead, it is an official investigation into your finances to determine whether or not you paid the correct amount of taxes. The IRS is specifically looking for questionable deductions and hidden income. Generally speaking, there are three main types of audits. These are:
- Field audits occur when an IRS agent comes to your business or home. They review your records, but they generally tell you before they’re coming and you usually get a chance to collect documents before the audit occurs.
- Office audits require that you show up at a local IRS office. Generally, the IRS is looking for specific information, testimony, or will ask you to produce specific documents.
- Correspondence audits are conducted through writing. The IRS will send you forms and request specific information.
Audits always begin with a certified letter in the mail. The IRS will not contact you over the phone to begin an audit. If anyone says they’re calling on behalf of the IRS and you have not received a letter, they aren’t the IRS.
If you receive a certified letter from the IRS indicating that you’re being audited, contact an IRS tax audit lawyer immediately. We can help.
Why Am I Being Audited?
In some cases, the IRS will audit individuals randomly. In other cases, the IRS has noted something on your tax return that doesn’t quite look right. Regardless, there are some things that will increase the likelihood of being audited. These include:
- Being self-employed,
- Seen your wages decrease,
- Failing to file for taxes,
- Deducting a home office,
- Deducting personal vehicle expenses,
- Making large charitable donations,
- Writing off hobbies as business deductions,
- Claiming food and entertainment expenses, and
- Having offshore or overseas bank accounts.
What Records Must You Turn Over?
You must turn over any information that the IRS requests. Usually, this will include information such as the following:
- Bills, invoices, and proof of payments,
- Expenses related to business travel,
- Business receipts,
- Divorce settlements and orders for child support,
- Paperwork related to civil (or criminal) lawsuits,
- Employment documents,
- Insurance claims,
- Loan contracts,
- Medical bills,
- Information related to property acquisitions, and
- Your tax preparation documents.
In addition, the IRS will serve you with a standard set of questionnaires to fill out. You can have an IRS tax audit lawyer help fill these out for you and prepare you for whatever impact their disclosure might have on your situation.
IRS Audit Reconsiderations
If you are audited by the IRS or the IRS claims there is a discrepancy in your file and claims you owe money that you think you don’t owe, you can file an appeal. The appeal is called an IRS audit reconsideration. In essence, you are submitting a request to reopen your audit. However, you must provide the IRS with a good reason to open your audit. Any of the following will do. You:
- Have new information concerning your income or expenses;
- Disagree with the IRS’s determination of what you owe;
- Have yet to appear for your interview or send the IRS requested information; or
- Never received your IRS report.
Are There Restrictions to IRS Audit Reconsiderations?
In order to request a reconsideration, certain conditions must be met. Additionally, there are some instances in which a reconsideration will be outright denied or you won’t have legal grounds on which to request one. Those include:
- You’ve already paid the full amount you owe;
- You signed an agreement stating that you will pay the amount the IRS says you owe; or
- A U.S. tax court has issued a final determination stating how much you owe.
In this cases, you may have some remedy available to you but an IRS audit reconsideration will not be among them. You will have to discuss your options with your IRS tax audit lawyer.
Know Your Rights
If you are being audited by the IRS, you have rights that you should be aware of. The most important right you have is to retain counsel to defend you in this matter or represent your interests.
An attorney can help prepare you for the consequences of disclosing information and may be able to negotiate a deal with the IRS for taxes owed. If the IRS is claiming you made fraudulent claims or failed to report income, an IRS tax lawyer can defend you from those charges.
Midwest Tax Relief Can Represent You During an IRS Tax Audit
If you are being audited by the IRS, an Omaha NE IRS tax audit lawyer can help you ensure the best possible outcome to the audit. Contact Midwest Tax Relief today.