Facing a tax audit can be nerve-wracking. IRS tax audits are not quite common. But, you may be chosen simply due to a random selection process or due to some red flags deducted in your files by the authorities.
Professional help from reliable tax filing services can help you be better prepared to face such a situation. Read on to find out how a professional can make it easier for you.
A tax audit can be of three different types: field audit, office audit, and correspondence audit. Every type demands different strategies to deal with efficiently.
A professional can educate you with all relevant information about the different audits. From understanding the reason behind the audit to confirming which parts of the tax returns are being examined, a professional will empower you with the right piece of information at every stage. This, in turn, gives you better confidence and more peace while facing the audit.
Knowing Your Rights
While facing an IRS audit, there are certain rights that you are entitled to, including the right to representation. Generally, the document carrying the brief about these rights will be included in the contract notice.
A tax professional will help you understand your position in the process and the treatment you deserve from the auditing team. You can plan a better strategy based on your circumstances, then.
An IRS audit will demand multiple records and supporting documents from the past three years or more. Companies providing tax filing services are well-versed with the list of documents needed for an audit. They can help retrieve these documents without any difficulty.
Additionally, tax professionals can evaluate your documents to ensure that you will be best benefitted from audit representation. With all documents in place, navigating through the process will be much easier.
Giving Away the Right Amount of Information
You do not want to divulge more information than required during an audit. Therefore, it is best to let the professionals handle the situation. When you hire a tax professional, they will represent you to the auditor and take care of all responses needed in person or in writing.
More than often, the auditing team finds it easier and simpler to deal with the tax professionals than with the business owners.
If you do not agree with the audit findings, tax filing services can help you prepare requests for appeal conferences with the IRS and prepare court petitions when needed. They can also help mitigate the financial outcome of the state and the federal tax audit.
Responding in Time
The tax professional can help you buy time to be well-prepared for the audit. They allow you to respond to appeals within the stipulated time. Sometimes, in mail audits, taxpayers tend to overlook the letters from the IRS and miss out on the deadlines. With a professional by your side, this is very unlikely to happen.
Analyzing Your Options
If the result of the audit is not in your favor and you are required to pay additional tax, the professionals can help you with multiple tax payment relief options that are available. For instance, the installment agreement allows you to pay the taxes in smaller amounts every month.
Ignoring a tax audit will result in severe penalties and other related fees. While there are no set formulas to handle an audit, there are some proven strategies to emerge out of it successfully. It would help if you were better prepared with your financial reports and other critical documents.
Also, remember that hiring a tax filing services firm with expertise in audit presentation is the safest and most efficient way to deal with an IRS audit.