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Understanding IRS Audits

What Does It Mean to Be Audited by the IRS

What is an IRS Audit?

An IRS audit is an examination of your financial information and accounts to ensure that you have accurately reported your income, deductions, and credits on your tax return. The primary goal is to confirm that you are in compliance with tax laws and that the government receives the correct amount of tax revenue.

Types of IRS Audits

IRS audits come in various forms, each with its own characteristics and complexity:

  • Correspondence Audits: These are the least invasive and typically involve minor discrepancies in your tax return. The IRS will send you a letter requesting specific documentation or clarification.
  • Office Audits: These are conducted at an IRS office and are usually more comprehensive than correspondence audits.
  • Field Audits: IRS agents will visit your place of business or home to conduct the audit. These audits are typically more complex and involve a closer examination of your financial records.

What Happens During an IRS Audit?

The audit process is generally as follows:

  • Notification: You will receive a notice from the IRS informing you of the audit and the specific areas they wish to examine.
  • Gathering Records: You’ll need to gather all relevant financial records, including receipts, bank statements, and tax returns, for the specified tax year.
  • Meeting with the Auditor: Depending on the type of audit, you may meet with an IRS agent in person or correspond through mail or email.
  • Examination: The auditor will review your financial documents, looking for discrepancies, errors, or missing information.
  • Resolution: After the examination, the auditor will present their findings. If discrepancies are identified, you’ll need to address them.
  • Outcome: The audit will result in one of three outcomes: no change, additional taxes owed, or a refund due to you.

How to Navigate an IRS Audit

Facing an audit may be daunting, but you can navigate it successfully:

  • Stay Calm: Keep a level head and remember that an audit is a routine process.
  • Thorough Documentation: Ensure your financial records are organized and readily available.
  • Professional Assistance: Consider seeking professional guidance to navigate the complexities of the audit.
  • Cooperation: Be cooperative with the auditor, providing requested information promptly and accurately.

Conclusion

Being audited by the IRS can be intimidating, but it doesn’t have to be a nightmare. Understanding the process and having the right support can make a significant difference. Priority Tax Relief is here to help you through the audit process, offering expert guidance, document preparation, and negotiation with the IRS. With the right approach and professional assistance, you can successfully navigate an IRS audit and ensure that your financial matters are in order.

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FAQs

 The simple answer is no. A business and a person are completely separate, thus, any personal tax debts or liabilities should not affect your business.

Tax debt can be an exhausting and complicated thing to deal with on your own. Communicating with the IRS and professionally handling your tax liabilities are just two of the services companies like Priority Tax Relief can offer.

No. The IRS’s Innocent Spouse Relief protects you from paying these additional taxes. However, this does not relieve you from household employment taxes, business taxes, individual joint responsibility payments etc. Priority Tax Relief helps you learn more about innocent spouse relief.

The most popular option to date would be an Offer In Compromise (OIC). At Priority Tax Relief, we help tax relief help become more accessible to taxpayers in need and help them understand how they can qualify for these options.

IRS tax liens are legal claims on your property when you do not settle your tax debts. The IRS usually sends out a notice when no payment has been made after a liability assessment. Find out more about tax liens with Priority Tax Relief.

Yes. Not only can the IRS put a claim on all your current property, tax liens can also affect any property or intangible or tangible assets that you obtain in the future. At Priority Tax Relief, we help you understand federal tax liens and how to communicate with the IRS.

 

Tax levies are the actual seizure of your property and are different from legal claims or tax liens. Settle your taxes before the IRS sends out a notice. Priority Tax Relief helps you understand tax levies and how you can avoid them.

Yes. Not only can they seize physical property but they can also legally take hold of the money in your bank account and other wages. To avoid this from happening, contact Priority Tax Relief now.

Your debt will, unfortunately, continue to grow and you will possibly lose a great number of your assets. It is definitely a scenario we do not wish to see happen to anyone, that’s why Priority Tax Relief makes sure that our help becomes within reach.

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