What happens if irs audits

A tax professional will be extremely valuable to help you prepare for office and field audits. Many taxpayers seek expert representation for these types of audits. Assert your appeal rights when needed. So, if you are being audited…. Potentially, a But getting help from a tax professional , making timely responses and having thorough documentation mean that you can get through an audit with the best possible outcome. Learn what the IRS is looking for during an audit, the steps you should take to prepare for an IRS audit, and when it's best to get expert help.

Learn how to respond and how long you can expect the audit to last. The IRS grants four types of penalty relief, but many taxpayers don't ever ask. Learn how to request penalty abatement from the IRS. Learn the three main benefits of engaging a power of attorney to research your IRS account and resolve your tax problems.

Learn what the IRS is looking for during a business tax audit, the steps you should take to prepare for an IRS audit, and when it's best to get expert help. The IRS tries to audit tax returns as soon as possible after they are filed. Accordingly most audits will be of returns filed within the last two years. If an audit is not resolved, we may request extending the statute of limitations for assessment tax.

The statute of limitations limits the time allowed to assess additional tax. It is generally three years after a return is due or was filed, whichever is later. There is also a statute of limitations for making refunds. Extending the statute gives you more time to provide further documentation to support your position; request an appeal if you do not agree with the audit results; or to claim a tax refund or credit.

It also gives the IRS time to complete the audit and provides time to process the audit results. You can find more information about extending a statute of limitations in Publication , Extending the Tax Assessment Period PDF , or from your auditor. The length varies depending on the type of audit; the complexity of the issues; the availability of information requested; the availability of both parties for scheduling meetings; and your agreement or disagreement with the findings.

Publication 1, Your Rights as a Taxpayer , explains your rights as a taxpayer as well as the examination, appeal, collection, and refund processes. These rights include:. The Statute of Limitations, however, does not apply to any civil charges. However, this is best done alongside a tax professional. The IRS will only reconsider your audit under limited circumstances. Penalties and interest continue accumulating while the IRS reconsiders your audit.

In the event that your audit reconsideration is rejected by the IRS, it may be possible to arrange an alternative settlement, such as an Offer in Compromise or a Penalty Abatement. An Offer in Compromise will allow you to settle your liability for only a small portion of the amount you owe. You can also request a Penalty Abatement, where the IRS can waive your tax penalties partially or in full.

In order for the IRS to grant you a Penalty Abatement, there needs to be reasonable cause or a number of other qualifying criteria must be met. If the IRS has issued penalties on your return after a tax audit, call a tax professional. A tax attorney is experienced in dealing with complex tax matters, and has the skills and knowledge to negotiate with the IRS on your behalf.

If you feel you were treated unfairly in an audit or an error was made on the part of the IRS, a tax lawyer will investigate your situation in-depth, as well as guide you through the entire process so that you are able to provide the IRS with the appropriate documents and avoid making damaging errors. With over tax professionals on staff from all areas of the tax industry, Polston Tax can find you the comprehensive tax help that you need.

Here are 10 audit triggers and tips on being audited. But the truth is, IRS audit triggers only affect a VERY small number of tax returns, and usually the auditors are satisfied by providing the documentation to back up your figures.

This is why organizing and holding on to your relevant records and statements is so important, as we noted in the first part of this tax series.

While most of us have earnings that fall well below a million per year, there are still some red flags that are more likely to trigger an audit, especially for small business owners. Convenience stores, restaurants, laundromats, car washes, and beauty salons are all more likely to be audited.

Errors in addition or subtraction will likely get caught, flagging your return for an audit, even if the mistake is in the favor of the IRS. Since tax software does all of your calculations for you, it has the distinct benefit of protecting you from this particular red flag. Many business owners will have to file a Schedule C to report business income as part of their individual tax returns.

This is true of sole proprietorships, which make up the bulk of small businesses. Schedule C will show the profit or loss of your company, but also land your return in the more-likely-to-get-audited pile.