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Stressing out with the unfilled IRS Tax Audit? Facing the risk of inaccuracies in tax returns can be overwhelming. Don’t let the legal issues of tax audits put you at risk. With over 20+ years of experience in auditing IRS taxes, Nashville Tax Solutions provides timely corrections and compliance, mitigating risks. Secure your future with our team now.
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Understand Deductions
It is important to be aware that when filing taxes, overestimating the amount of deductions you are entitled to claim can increase the likelihood of being selected for an audit.
Report All Income
Small amounts of income can make a difference when it comes to taxes. The IRS has a matching system in place, which means it's crucial to make sure that all sources of income are accurately accounted for. By doing so, you can avoid any potential discrepancies and ensure that you're meeting your tax obligations.
Avoid Round Numbers
When you come across round numbers in deductions or expenses, it could suggest that the figures are not exact and may indicate estimates, leading to inaccuracies. Therefore, it's always advisable to double-check such figures to ensure they are precise.
Electronic Filing
E-filing is efficient and reduces the chances of mistakes that might lead to an audit.
Prepare for the Possibility
It is essential to take necessary precautions to avoid audits, but it's also crucial to be prepared if an audit does occur. You can do so by keeping well-maintained records and having a solid plan in place. This will not only help you navigate through the audit process with ease but also demonstrate to auditors that you are responsible and compliant.
If you disagree with the audit results, you can request a conference with an IRS manager, file an appeal with the IRS Appeals Office, or seek mediation. It's recommended to consult a tax professional or attorney for assistance. Documentation supporting your case is crucial.
To avoid audit risk, report all income, avoid questionable deductions, and seek advice from a reputable tax professional. Electronic filing methods can also help reduce errors.
Individuals with higher incomes, cash-intensive businesses, and those in professions requiring significant travel or entertainment expenses may face a higher audit risk. Self-employed individuals and small business owners are also more likely to be audited due to the potential for underreporting income or overstating deductions.
The IRS employs various methods to select tax returns for review, including random selection, computerized screening, and comparing information from third-party documentation. They also target returns that involve non-compliant taxpayers.
Underpayment in an audit may result in back taxes, interest, and penalties. In rare cases, criminal charges for not paying or not filing taxes may apply.
The IRS offers payment options, such as installment agreements or offers in compromise, to settle tax debt for less than the full amount owed. Property seizures and wage garnishments are last-resort options.
During a field audit, an IRS agent will examine your records in detail. It's important to be prepared by organizing all necessary documentation and understanding the items being questioned. Consider having a tax professional present.
Business red flags include consistent losses, large year-over-year changes in income or expenses, excessive travel/entertainment/vehicle expense deductions, high cash transaction volume, and income-lifestyle discrepancies.
Getting audited by the IRS doesn’t guarantee an audit from a state tax agency, such as the Florida Department of Revenue (FL DOR). However, if the IRS finds financial irregularities, it increases the chances that the FL DOR could audit you, and if they do, they’re likely to find problems. This is especially true with complex tax issues, such as Florida’s sales and use tax.