The legal duty of taxpayers to fully comply with federal tax laws is the foundation of “Voluntary compliance” in the American tax system. Most taxpayers, in fact, voluntarily comply with this duty, however, there are always some that fail. The IRS has an impressive...
IRS Audits
BUSINESS RELATED IRS AUDIT TRIGGERS
The mere act of placing the envelope that contains a tax return into a mailbox may be a cause of stress for most taxpayers. None of us want to do anything that will alert the IRS to take a closer look at our tax returns. IRS examinations, or “audits” as they...
SOME FACTS ABOUT IRS AUDITS
The IRS audited approximately 1.0 million tax returns in Calendar Year 2017. This was less than 1% of all returns, approximately 0.5 percent. The IRS conducted 74.8 percent of Fiscal Year 2018 through correspondence audits. Of these 1.0 million audits of tax...
HOW THE IRS USES AUTOMATION TO REVIEW TAX RETURNS
While the IRS does not have the manpower that it had 20 years ago, there are certain taxpayer actions that can trigger an audit by the Internal Revenue Service. As technology continues to evolve at a significant rate, the IRS has increased its use of automated...
IRS UNDERSTATES COMPLIANCE EFFORTS USING “REAL” AND “UNREAL” AUDITS
The National Taxpayer Advocate (NTA) has published several opinions about the issue of “real” vs. “unreal” audits. Under Internal Revenue Code (IRC) § 7602(a)(1), the IRS has the authority to examine any books, papers, records, or other data that may be...
TAX AUDIT ISSUES FOR CASH BUSINESSES
The IRS is aware that cash-intensive businesses have more opportunities to commit tax fraud. IRS tax audits frequently target these types of businesses and have special techniques used to spot errors or underreported income. Tax Issues for Cash Businesses Cash...
THE TOP 5 REASONS THE IRS WILL AUDIT YOUR BUSINESS
You can’t completely eliminate your risk of being audited by the IRS. However, some taxpayers are more likely to being audited than others. If you have a higher audit risk, make sure you double-check your numbers and have your supporting documentation ready in...
TYPES OF IRS TAX AUDITS
There are generally three types of IRS tax audits. Regardless of which type of audit you are undergoing, a tax attorney can handle communications with the IRS employees on your behalf and give your guidance during this process. Correspondence Audits Correspondence...
WHAT DO IRS REVENUE AGENTS DO?
IRS Revenue Agents conducts tax audits of individual and business taxpayers. They are not responsible for collecting delinquent taxes and instead work to assess the correct amount of tax. Revenue Agent Qualifications Revenue Agents generally have a bachelor’s degree...
IRS ESTATE TAX AUDITS
Estate tax returns can be audited just like any other tax return. However, there are some unique issues to consider when you’re involved in an estate tax audit. Reasons for Audit Larger estates are more likely to be audited. Estates valued below $11.4 million in 2019...