Is Your 2020 Income Tax Return Being Audited?
Have you been notified that your tax return is being audited?
Does the thought of working with the IRS feel intimidating?
Do you need help with your income tax return in the Ann Arbor area?
Are you afraid of the IRS auditing your return?
Don’t worry, an audit of your income tax return doesn’t always mean there’s a problem. Returns can be selected randomly and can also be selected if a partner or investor was selected for audit.
Even if your income tax return is selected for audit, chances are good the auditor will accept it as is — unless they question part of the return.
In general, the IRS has 3 years after a return has been filed to audit that return. However, they can go back farther if the audit finds an error that requires additional investigation.
If your return is selected for an audit, don’t panic! As a taxpayer, you have the right to be treated courteously and with confidentiality. And, remember, IRS agents are not out to “get” anybody. They are professionals doing their jobs — correcting errors and checking facts — and want the audit to be resolved quickly, efficiently, and accurately.
Income tax audits can be completed through the mail, or in-person. The IRS determines how to complete your audit based on certain factors, like how complex the return is.
1. Correspondence audits (via mail) are used for simple, individual returns (Form 1040) when there are questions about items like:
- earned income tax credit
- medical expenses
- employee business expenses
- and more.
2. Face-to-face audits (“office audits”) are held in IRS offices for more complex issues, including:
- income from tips, annuities, royalties, and more
- deductions for bad debts
- complex itemized deductions (theft losses, for example)
- and more.
3. Very complex income tax returns are audited at the taxpayer’s place of business, for issues that might include:
- cash intensive businesses
- executive compensation
- research and development credits
- crypto currencies
- and more.
Tips for Making an Audit an Easier Process
If your return is selected for audit, you can make the process easier on yourself following these tips:
- Always maintain accurate, well organized records
- Respond to all requests for information promptly
- Only provide the requested info
- Be calm and polite.
Your audit will be easiest if you:
- know your rights
- understand the audit process, and
- know the law.
And if you don’t, call Amador Accounting. Lisa Amador is an Enrolled Agent — a federally authorized tax advisor that represents taxpayers during audits. Enrolled Agent is the highest credential awarded by the IRS.
Amador Accounting Can Help
Working with the IRS can seem complicated and intimidating at times – especially when you’re facing the fear and uncertainty of an audit. It doesn’t have to be! Amador Accounting is here to help. If you are worried about an audit, have issues with the IRS, or have questions about your taxes, call Lisa for answers.
Lisa has been helping people just like you with their income tax in Ann Arbor, Saline, Ypsilanti, Belleville, South Lyon, and all of southeast Michigan for over 25 years.