Filing out tax forms is difficult enough, but becoming the subject of an audit by the Internal Revenue Service (IRS) is an even larger headache. There are steps you can take to reduce the risk of becoming the subject of an audit. One is to be aware of common triggers that result in a closer review by the IRS.
It is wise to get an early start on tax filings. This is particularly true in the wake of the recent Equifax breach. A recent piece by CNBC notes the massive leak of confidential consumer information could result in an increase in tax fraud — a process when fraudsters use tax payer’s information to get their tax refund.
The Internal Revenue Service (IRS) conducts audits for a variety of reasons. Some audits the result of discrepancies in tax filings, others are allegedly random. Whatever the reason for the audit, those who are the subject of scrutiny by the IRS likely have one thing in common: the stress of the event.
How important is the nonprofit sector to the economy? Pretty important, if you gauge things by data compiled by a variety of organizations. In Minnesota alone, nonprofits are estimated to be responsible for the employment of more than 14 percent of the workforce. Nationally, estimates are the sector contributes close to $890 billion to the overall economy.
The power of the Internal Revenue Service can be immense. It has the capacity to make life misery for anyone in Minnesota suspected of failing to meet tax obligations. The agency doesn't tend to wield that power right off the bat, however. An experienced tax attorney knows that actions don't tend to start with audits. First, notices of suspected liability are sent. If responded to promptly and properly, an audit might not even occur.
The failure of the new Congress and administration to fulfill on the pledge to repeal and replace the Affordable Care Act undoubtedly leaves many with "question mark" text bubbles dancing in their heads. Republicans in Washington say the issue is not dead, but for now, the existing law remains in place.
More often than not, experiences with the federal government’s tax collecting arm are not pleasant; either because the IRS believes that a small business owner is cheating Uncle Sam out of money, or business owners feel as if they are unfairly singled out because of their success.
Getting an audit notice can be extremely stressful, especially if that audit could potentially result in some sort of liability. To the best of your knowledge, you and your accountant did everything accurately so you worry about why the IRS has asked for an audit.
Minnesota residents may believe that the IRS can only audit their returns for three years after they are filed. While this is true in many cases, there are also scenarios in which the IRS has six years to audit a return. For instance, if an individual understates his or her income by more than 25 percent, the government has six years to audit that return.
The start of the new White House administration has been interesting to watch, to say the least. Many pundits, including here in Minnesota and Wisconsin, point to the activity with a suggestion that it is unprecedented. The reality is that much of what is happening is not unusual. Every new administration brings with it change. The key questions many might be asking, though, are whether the dust will settle and how long it will take.