The Internal Revenue Service, popularly known as the IRS, is the revenue service of the United States federal government that is tasked with the collection of taxes and enforcing of the Internal Revenue Code (IRC).
Annually, scores of citizens face an audit of their individual tax returns by IRS – sometimes randomly or often following any red flags that may come up in their figures. Ideally, this is an easy and speedy process taking only a few months to resolve if everything is in check but a period of long and dreadful days in the event of any irregularities.
Why You Could Land in Trouble with the IRS:
Failure to file tax returns by the set deadline, tax evasion through failing to report taxable income, under-reporting taxable income are reasons that will land you in trouble with the IRS. Others include exaggerating the magnitude of tax exemptions, which is punishable by up to 5 years imprisonment and foregoing tax payments on gambling and lottery winnings. These are just a few things that could put you at a greater risk of IRS audits and arise out of ignorance, avoidable mistakes or plain non-compliance. For more examples of things that can trigger a red flag, resulting in an audit, check out our blog here.
Surviving an Audit:
Legally, you have the right to representation before the IRS in the event of an audit. It is important to get representation from pros as they can provide you with expert guidance from their vast years of experience in working with complex tax issues. Many taxpayers opt to represent themselves as they think it is too costly to hire a professional. The reality though, is that not getting help with tax relief will most likely cost you more in terms of fines and penalties. That is if you are unable to negotiate an appropriate settlement with the IRS. This is why there are a number of professionals permitted to represent you.
For instance, you may choose a Certified Public Accountant (CPA). A CPA has the professional training to audit financial statements and tax returns and assist you in crucial tax matters. You may also use the services of Enrolled Agents, mostly referred to as EAs. Enrolled agents represent taxpayers before the Internal Revenue Service for tax issues including audits, collections and appeals.
Get a good Tax Defense Attorney:
It is best advised to work with a tax attorney. Unlike CPAs and EAs, tax attorneys can represent you in court if you become the subject of a criminal investigation or criminal charges. Due to attorney-client privilege, communications with the lawyer are protected meaning the government cannot force the attorney to testify in court. This privilege generally does not extend to a Certified Public Accountant (CPA) or an EA. This is also especially important if the audit escalates into criminal charges.
Dealing with the IRS can be an agonizing and much unbearable process if done individually, not forgetting that you need to save as much money and avoid penalties during the whole process, it is best to employ the use of a tax attorney for both advantages.
If you are in need of a qualified tax attorney, call Ayar Law at 248.262.3400 for free, no-obligation advice on your matter.