Most of us feel uncomfortable when we receive a notice saying we will go through an audit procedure done by the IRS. The reason behind this is we generally don’t know much about what an audit is. And what are the different kinds of audits present out there?
Internal Revenue Service or IRS is entitled to examine any individual or organization if they see any irregularity. After thorough checking, the IRS can impose a penalty or levy assets of the concerned party. You can contact any tax experts (including tax relief lawyers) if you need assistance.
What is a Tax Audit?
The main job of the IRS is to examine the financial matters of individuals and businesses. They can summon anyone and receive financial documents and data. They look for any sorts of financial and tax irregularities.
Every year, a lot of people and organizations go through IRS audits. If you have been notified of an upcoming audit, you must consult a professional tax expert organization (including an IRS law firm).
The IRS will check all of your financial documents and look into tax matters closely. You will need to submit all important information to the governing body.
Different Types of Tax Audits
There are mainly four major types of tax audits exist. What type of audit will take place depends on the information IRS got. Usually, if you have received a notice from the IRS, probably it is a correspondence audit.
IRS Correspondence Audit
In this type of audit, the IRS will request a person to submit essential information on his tax returns. All his expenses, losses, and other data on his financial status should be submitted to the IRS body.
IRS Field Audit
The second type of audit is an IRS field audit. Here, the IRS auditor will meet you in person. He may ask some questions regarding your financials. The best possible option to face an IRS auditor is to hire a tax expert (whom includes an attorney for IRS problems).
IRS Office Audit
The third kind of audit is the IRS office audit. If IRS wants, they can examine your office and audit all the papers regarding the business. Here, the commission may ask you to present in person during the audit procedure. Consider taking the help of a tax expert in these situations.
Taxpayer Compliance Measurement Program or TCMP audit is very rare but present. Here the IRS checks random people to see if they comply with the existing tax laws or not. IRS can thoroughly search essential documents and tax returns if they suspect a potential tax exemption.
If someone thinks they don’t have anything to hide and feels uncomfortable, he/she can file an appeal. If the court thinks there is no reason for further examination, the person will be forgiven. But if there is a mishap in tax payments, he will be charged with penalties.
Hope the discussion above was insightful and will help you to have a better understanding. In case of any suggestions or queries, please feel free to share with us below in the comment section with us to make it more interesting for others.