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The U.S. Internal Revenue Service, or IRS, is an agency of the U.S. federal government that collects taxes and enforces tax laws. If you receive a notice of an impending IRS audit, you must take the matter seriously. The IRS is a powerful agency that has the ability to impose penalties ranging from civil fees to imprisonment for criminal tax evasion, depending on the severity of the non-compliance. This section will discuss what an IRS audit is and what to do if you receive notice of an upcoming audit. What is an IRS Audit?An IRS audit is a review of an individual’s or business’s tax return to ensure that all income has been reported and all taxes have been paid. The IRS may contact you about an audit if you report unusual income, claim deductions that are questionable, or have errors on your tax return. Taxpayers who under-report their income, claim large deductions, fail to file their taxes on time, and business owners are more likely to be audited. The auditor will require the individual or business to substantiate documentation to prove that the information claimed on the tax return is correct and that all required tax payments have been made. Hire a CPA ImmediatelyIf you receive an IRS audit notice, do not respond on your own. Do not communicate with the IRS directly. Immediately contact a CPA to communicate with the IRS on your behalf. If you respond to the IRS yourself, you may inadvertently admit something, give information that is contradictory, or get caught in a lie. This can result in substantial financial penalties and legal consequences.
A CPA will also ensure that the matter is addressed promptly. Many taxpayers who receive a notification of an IRS audit simply ignore it. This results in missing critical deadlines, which allows the IRS to invalidate deductions and substantially increase taxes and penalties. Hiring a CPA will prevent you from saying the wrong things to the IRS and will ensure that the situation is addressed in a timely manner, saving you money and keeping you out of legal trouble. Have you received an IRS audit notice? Don’t wait! Contact Larry Bradford, CPA, today. Larry Bradford has over 35 years of experience as a Certified Public Accountant and will use his expertise to help you properly handle your upcoming audit. Call 512-402-0049 or send an email to larry@bradfordtexas.net to set up an appointment.
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Did you know that filing late taxes can result in the complete loss of your tax refund? The IRS takes filing taxes very seriously, and if you don't remember to file on time, you should be aware of the consequences you could face. Filing Late Taxes Puts Refunds at RiskA tax refund is a refund of the taxes that an individual or corporation has overpaid to the government. A tax refund can be obtained only after filing a tax return. The IRS has a set of guidelines for when you can file your taxes and still receive a refund. If you fail to submit a return for two years past the tax submission due date, you will not be entitled to any refund whatsoever. Many individuals believe that if they are entitled to a refund, they aren’t required to file their taxes. This is a common misconception that can result in significant repercussions. Not only will filing late result in the total loss of a refund, if an individual does not file for more than three years, they can face federal criminal prosecution or jail time. Preventing the Loss of Your Tax RefundThe only way to avoid forfeiting your tax refund is by staying caught up on tax filings. You should always file your taxes, even if they are late. Larry Bradford, CPA can help you stay current with your tax filings to protect your refund and avoid potential consequences from the IRS. To set up an appointment, send an email to larry@bradfordtexas.net or give our office a call at 512-402-0049.
Be prepared. Tax audits are coming for the middle class. The United States government recently announced a plan to provide the IRS with $80 billion in additional funds and allow them to hire 87,000 new IRS employees under the Inflation Reduction Act. This upsurge in funding and hiring will result in an aggressive increase in auditing tax returns. The IRS is going to be much more thorough when it comes to collecting taxes and examining tax returns. This also means that there will be higher taxes for anyone the IRS believes has not been paying their fair share. Who Is at the Highest Risk for a Tax Audit?Tax audits are a surprisingly common event. Last year, the IRS conducted over 659,000 audits. With the incoming influx of IRS employees, the number of audits will drastically increase. The IRS is not just looking for those with the highest incomes; they are also going after lower and middle income earners. Statistics show that low-income households are five times as likely to be audited by the IRS compared to everyone else. Individuals who have completed their own tax return and those who own a business are also at an extremely high risk of getting audited. How to Protect Yourself From a Tax AuditIf you want to avoid an audit, it's best to hire a CPA to help you prepare your taxes. With their knowledge of handling tax preparation, a CPA will make sure everything is in order so that you won't be audited. In general, if a CPA completes your tax return, you will not be audited.
Don't get caught unprepared. Larry Bradford, CPA has over thirty-five years of experience as a Certified Public Accountant and will utilize his expertise to help you avoid a tax audit. Give our office a call at 512-402-0049 or send an email to larry@bradfordtexas.net to set up an appointment. |
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