Experienced Counsel For Tax Audits
Engaging with the Internal Revenue Service (IRS) and its audit procedures can be unsettling and sometimes frightening. At Gordon & Alvestad, PLLC, we can help you survive this often-challenging process.
A tax audit is done to ensure the accuracy and integrity of the tax system. While you receive a letter from the IRS informing you of an audit, it is not necessarily an allegation of wrongdoing. The IRS randomly selects a certain number of tax returns every year for an audit.
Over Four Decades Of Legal Experience With Tax Audits
Of course, there are things you may have done on your tax return that may flag it for an audit, including unusual numbers of deductions or charitable gifts. If you are self-employed, home office deductions or other work-related deductions may increase the likelihood of an audit.
And failing to report income, whether by inadvertence or intentionally will often generate an audit as well as a tax collections letter. Attorney Paul Alvestad has more than 40 years of experience with tax law and other legal matters.
Why You Want Experienced Tax Audit Representation
The administration of the tax code is very technical. There are rules, rules and more rules. Any mistake of one law or regulation can compound itself within a tax return. With all these rules, it is easy to make a mistake.
The reason you want an experienced attorney representing you during a tax audit or examination is that your confusion or misunderstanding can have serious consequences.
What You Need To Know About Tax Audits – Trusted Answers From An Experienced Tax Lawyer
Because IRS tax audits have the potential to disrupt your financial circumstances and are associated with a lot of worry, accessing and understanding accurate, up-to-date information is important. Our attorney provided these answers to questions commonly asked by clients on this topic.
What happens during an IRS audit?
An audit is a formal review of your financial records by the government to make sure your tax return is correct and follows the law. There are three main ways this happens: through the mail, at an IRS office, or in person at your business or home. The IRS uses a computer system to flag returns that look “unusual” compared to others in your income bracket. During the process, the agent will ask for specific proof – like bank statements, receipts and canceled checks – to back up the numbers you reported. In Washington, if you run a business, you may also face a state audit from the Department of Revenue, which looks specifically at your local business and sales tax records to ensure our state’s specific tax rules were followed.
How should I respond to an audit notice?
You should respond to the notice by the deadline listed on the letter, which is usually 30 days. Ignoring a notice will not make it go away; instead, it allows the IRS to automatically decide you owe the extra money and start taking your wages or bank funds. When you respond, you must provide the exact documents they asked for, but you should not give them “extra” information that wasn’t requested, as this can open up more years of your life to investigation.
Having a lawyer represent you is vital because our attorney can act as your “shield,” handling all communications with the agent so you don’t accidentally say something that makes the situation worse or gives them a reason to look deeper into your finances.
Can an audit lead to additional taxes or penalties?
Yes, if the IRS or the Washington Department of Revenue finds that your math was wrong or that you didn’t have receipts to prove your deductions, they will send you a bill for the difference. On top of the tax you owe, they will add interest that has been building up since the day the return was originally due. They may also add “accuracy-related” penalties, which are typically 20% of the underpayment.
Could A Tax Audit Lead To Criminal Charges?
If you speak with an agent or representative of the IRS, they are federal officers. If you tell them something while trying to explain your taxes, and it is inaccurate, they could suspect you of tax fraud and your statements could be viewed as lying to a federal officer, a federal crime, subject to criminal prosecution in addition to any tax law violations.
Our attorney has the experience and understanding of tax law. We can protect you from making any statements or representations that could lead to these charges. In addition, we will work to minimize the taxes, penalties and interest that could result from a tax audit’s determination that you have a tax delinquency.
Contact Us Today!
Our lawyer can help you or your business deal with a tax audit in Tacoma or throughout Washington. Call our Gig Harbor office at 253-666-9219 or use our online contact form to arrange a meeting today.
