If you’re among taxpayers in Georgia who owe more than $50,000 and the IRS is investigating your finances, it is understandable that you might feel overwhelmed and worried about the potential outcome of an investigation. You might have land or assets overseas, trusts and other investments, or business issues that have created a complex situation that you are not sure how to handle. The good news is that there is tax resolution support available for those who are facing an IRS audit.
To prepare for an audit, you’ll want to gather numerous types of documents. In fact, the IRS publishes a website featuring a list of things it might require if it calls you to an audit. Keep in mind that honesty is the best policy regarding a tax investigation. If you don’t have a document the IRS has requested, do not try to create one or make excuses. Just tell the truth.
Common documents needed for an IRS audit
Every case is unique, and the tax auditors may want to review a document from one individual or business that they haven’t requested from another. The following list shows some of the most common documents and financial information that the IRS asks to see when conducting an audit:
- Legal documents that pertain to your finances, such as a divorce settlement, property acquisitions and tax documents
- Contracts such as loan agreements
- Bills, receipts and cancelled checks
- Shareholder documents, such as Schedule K-1, if relevant
The IRS might also want to scrutinize a personal diary or log if it contains financial information. If the IRS conducts the audit via the U.S. postal service, you might also have to send in a questionnaire.
What’s at stake in an IRS tax audit?
Once tax auditors have investigated your finances, several outcomes are possible. The IRS might determine that you’re “in the clear,” and no further action is necessary. If that’s not the case, you might incur a reduced refund or face financial penalties regarding a particular issue. You could also wind up owing even more than the $50,000 you initially thought you owed.
In a worst-case scenario, if an IRS audit determines that you are non-compliant, it is possible that you could face charges for tax evasion. As with all criminal charges, you may seek counsel before navigating such proceedings. In fact, you can do it as soon as you learn that you are going to be the subject of a tax audit. With experienced guidance and support, you may be able to mitigate your circumstances and have a more positive outcome than you might be able to achieve on your own.