The IRS, like any other government body, is doing its part to make America great. This includes ensuring that US citizens are paying their fair share of taxes says, William D King. The ways in which the IRS chooses to check people’s income can be strange and confusing (for both people filing tax returns and tax accountants).
The main goal of this article is to understand an audit report during tax season.
Summary:
An audit report isn’t always bad news; it depends on the scale of the audit. A very small-scale audit might end up resulting in a refund or no adjustment as long as there aren’t any errant errors on your return (this is why it’s important for you to double-check your work throughout the year). But if there’s a significant misplacement of funds on your return, then the auditor is probably going to want to talk things over with you.
Reflection:
One thing that can be challenging about tax season is trying to make sense of an audit report. Sometimes it’s difficult because people don’t understand the scale of an audit and how this will change their tax refund. Other times it can be due to a lack of understanding on what exactly the breakdown of their numbers means for them (and how they should proceed). Luckily, if there are no huge financial misdoings in your return, then you’ll typically end up getting more money back than if you hadn’t been audited at all says, William D King. An extra income always helps! We’re glad you’re here. Please don’t forget to check out our services and let us know if we can help you or answer any questions!
An audit report isn’t always bad news; it depends on the scale of the audit. A very small-scale audit might end up resulting in a refund or no adjustment as long as there aren’t any errant errors on your return (this is why it’s important for you to double-check your work throughout the year). But if there’s a significant misplacement of funds on your return, then the auditor is probably going to want to talk things over with you.
One thing that can be challenging about tax season is trying to make sense of an audit report. Sometimes it’s difficult because people don’t understand the scale of an audit and how this will change their tax refund. Other times it can be due to a lack of understanding on what exactly the breakdown of their numbers means for them (and how they should proceed). Luckily, if there are no huge financial misdoings in your return, then you’ll typically end up getting more money back than if you hadn’t been audited at all. An extra income always helps!
Here are some FAQs recently asked by clients (followed by our responses).
Q: I still think the audit will go in my favor. Should I take it to court?
A: It definitely sounds like you’re in denial about the potential implications of your tax situation! We know this can be a stressful time for people, but that’s why we’re here.
Tax audits are usually conducted because someone has filed their taxes incorrectly. Or has failed to report certain incomes explains William D King. While it isn’t impossible for your situation to end favorably. You should really consider how eager you are to deal with everything that comes after an audit. This could mean dealing with the IRS and possibly paying back taxes plus interest. Along with legal fees involved in court proceedings. You should also keep in mind that even if the audit is resolved in your favor. You may still need to pay back taxes and interest. This can be particularly burdensome for those with smaller incomes. Or who otherwise struggle to make ends meet (i.e., students, retirees, etc.).
The best course of action would probably be to settle out of court as soon as possible; however, this again will depend on what the auditor has discovered during his or her research into your tax return. You should also remember that a settlement could mean a greater financial burden than going to court! It all depends on how much income was missed during the year. If it’s worth it for you it potentially has a black mark on your credit report. Because of legal fees once everything is said and done.
Q: What is the best way to prepare for a tax audit?
A: The very first thing you should do between receiving an audit notice. And actually meeting with the auditor is to contact a professional such as (whoops, we’ve been asked not to advertise).
Conclusion:
William D King says there are many things you can do in order to better prepare for an audit. These include gathering up all your documents, keeping thorough records. Make sure you have copies of everything the auditor requests (don’t forget that TIFs may be requested). You should also gather any receipts or bills that could help your case; these will likely end up being provided at some point during the course of the audit.