Are you looking for DIY tax audit advice after opening a letter from the IRS? Each year, many taxpayers decide to take on Uncle Sam and IRS problems without professional representation. Although this route may seem cheaper and more convenient, it can also be tricky. There are a few things you should know before you choose to represent yourself. These simple tips may help you tackle your audit like a pro. Drag Your Feet a Bit Good things don’t always…
Understanding what triggers a tax audit will help keep your return on Uncle Sam’s good side this year. Do you know what triggers a tax audit? While most every tax-paying citizen knows what an audit is, very few are aware of the red flags they should avoid. However, the last thing you want to find in your mailbox is a personal letter from the IRS. Luckily for you, there are ways you can avoid catching the government’s attention. Here are…
Learn what sets the best tax audit services apart from the rest. Do you need to find dependable tax audit services after receiving a terrifying letter from the IRS? Tax audits often catch people by surprise, and many simply pay the amount demanded by the government out of fear. However, if you believe your taxes are correct, you shouldn’t feel pressured to overpay because Uncle Sam seems scary. Finding the right company to represent your audit may be the best…
If the IRS ever tries to question your return, this DIY tax audit advice can help. With millions of other taxpayers across the country, why did your return get selected for an audit? Well, according to the IRS, you were one of many unlucky individuals. For taxes filed in 2017, about 1 million people received audit notifications. That’s 0.5 percent of all returns! So, no, you’re not alone. Here’s the good news, however. Just because the IRS chooses to audit…
Even if you're doing everything right, the prospect of a tax audit can be terrifying. What triggers a tax audit? Find out now. There are few things as terrifying as potentially triggering a tax audit, yet the process itself is a bit of a mystery. Exactly what triggers a tax audit? How can you avoid one? The IRS isn't an open book about anything, including what triggers a tax audit. While the IRS does audit a certain amount of random…
Is online tax prep a good idea or does it pose a risk you can’t afford to take? Take a closer look. Online tax prep is undoubtedly a popular choice, but is it always the best choice? There are dozens of handy programs allowing users to prepare and file their taxes online without professional help. Many people use these programs because they think hiring a professional accountant is either unnecessary or too expensive. However, the fact is that hiring a…
Internal Revenue Service red flags lurk around every corner, so don’t get caught red-handed by leaving them in your return. Unfortunately, Internal Revenue Service red flags are more common than you might think – and they might get you in trouble. If you want your returns to stay un-audited (and don’t we all?), it’s best to avoid them. Of course, that first means identifying them. Here are five of the most common red flags that crop up and how to…
Are you guilty of these common tax audit triggers? The last thing you want to see in your mailbox is an envelope marked "Official Business" from the IRS. You'd never mislead the IRS intentionally. But it's easy to call attention to yourself if you're committing these tax audit triggers. Before you file your return, read through this list and make sure none of the following applies. Trigger 1: Failing to Report All Income You know all those income forms you…
If you are sick of audit triggers making life miserable every year, these tips will clue you in on what you are doing wrong. Have you suffered through a tax audit in the past? Are you trying to avoid needless audit triggers this year? Then it is important to understand a few of the most common tax audit triggers. If you don't carefully manage your return, you'll gain the interest of the IRS. That's not what you want! Basic Criteria…
Does the IRS have you feeling cornered? With the right help, you can beat a tax audit. Most people are afraid of the IRS, particularly when it comes to being audited. But if you take the right steps, you can beat a tax audit. A very involved process is ahead of you, one that requires serious preparation. It’s important to keep in mind that if you’re not ready for what’s coming, it won’t go well for you. Some people take…
Thinking about using tax audit services? Gather the right information before making any decisions. If you’re facing an IRS audit, you might be tempted to turn to tax audit services. They’re advertised everywhere, on television and the radio, and they often promise that they can make your problems go away for good. Unfortunately, many of these services aren’t what they claim to be. IRS audits are incredibly stressful, and tax audit services design their advertisements to take advantage of scared…
Will you be representing yourself at a tax audit? This DIY tax audit advice is crucial to ensure success. Did you receive a tax audit notice, and now you are looking for DIY tax audit advice? If you will be walking into the lion’s den, without the advice or representation of a seasoned tax professional, there are a few important points you should remember. Representing Yourself: What that Entails Before making the decision to go it alone, consider a few…
Understanding what triggers a tax audit can help you defend yourself, well before the tax forms are even filed. Here’s what you need to know. As with most things related to the complicated tax code, figuring out what triggers a tax audit can seem like an exercise in futility. The good news is that audit letters go out to only a tiny fraction of individuals and businesses each year. The bad news is that sometimes the target of that audit…
Is your business inadvertently flying these IRS red flags? Taxes are a major challenge to many, if not most, small business owners, and the last thing you want to do is send up the worst IRS red flags. What might trigger an audit? What things are tax deductible? There are so many questions. With so much to do, it can be easy to make a critical mistake on your small business return. Here are five of the worst mistakes you…
If you were audited by the IRS, do you think they would be fair to you? Many people believe that if they have receipts and can prove their deductions, the IRS will accept it. That may have been true years ago, but today’s IRS is ruthless. This court case is proof of that. The Story David and Veronda Durden gave money to their church on a consistent basis. Over the course of a year, their contribution totaled about $25,000. During…
If you are self-employed and report a low amount of profit from your business—you could be ripe for an IRS audit. The IRS has a trick up its sleeve to catch “tax cheats” by attempting to match their lifestyle to the amount of taxable income reported on their tax returns. Don't be surprised it the IRS invites you in for an audit if you live in a $1 million house with reported income of $30,000 per year! The “lifestyle audit”…
The IRS is auditing more people who deduct employee business expenses. If you work for someone and deduct work expenses, then this report is for you. If you are called in for an audit, do you know how to defend yourself? Many people go into an IRS audit with confidence, believing that their receipts will allow their tax deductions. But when the auditor is done with them, ALL of their work expenses are denied. So, where did they…
Why the IRS Audits more Small Businesses than Big Corporations Many small business owners believe that they are too small for the IRS to audit. After all, wouldn’t the IRS collect more money for the government by auditing larger businesses? The answer is: no. The IRS brings in more dollars per hour auditing small mom and pop businesses, than they do auditing medium and large companies. Why is that the case? Because the larger companies keep impeccable records…
The IRS’ Passive-Aggressive Model to take MORE from You The IRS may have become the most cost-efficient government agency of all. That may sound like good news, but there is a dark side to that efficiency. Unfortunately the IRS is no longer interested in collecting the correct amount of taxes, but instead is using a passive-aggressive model to take more from you, even if means denying your right to due process. The efficiency. Since 2001 the IRS has…
What to do if you get an IRS audit letter You should immediately open any mail from the IRS, because it usually requires some sort of action within a very narrow time-frame under the threat of additional taxes, interest and penalties. Be sure to have us review it BEFORE you make any contact with the IRS to explain the issues involved and the best way to respond. We almost always recommend that you let us respond instead of you.…
10 IRS Audit Tricks to Take MORE from You The IRS has become more aggressive in collecting taxes and has implemented new methods to balance the federal deficit from your pocketbook, including: More automated Notices (many of them are wrong) The IRS Automated Under-Reporter Program has been very effective in collecting taxes. In 2011 it collected an additional $1,670 per CP2000 letter without the aid of humans based on a mismatch of information reported to the IRS compared…
At Incompass, we don’t employ seasonal non-licensed tax preparers, like the big chains hire. Our tax professionals are LICENSED Enrolled Agents (EAs) or Certified Public Accountants (CPAs). Most people know what a CPA is or have at least heard the term CPA, but many are not aware of the tax professionals called EAs. One reason is that there are about ten times more CPAs than EAs. EAs are federally licensed by the Dept. of Treasury to prepare tax returns and…
Have you ever wondered why some tax returns are audited by the IRS while most are ignored? Well, there’s a whole host of reasons to this age-old question. The IRS doesn’t have enough personnel and resources to examine each and every tax return filed during a year, so they rely on a variety of systems to target the returns that they believe will generate the most revenue per hour of time for the auditor. Why Lower Incomes are Audited at…
Beware of telemarketers and advertisers on radio and television who make claims that sound too good to be true and who claim that they can settle IRS claims for “pennies on the dollar”. To avoid getting ripped-off in these scams, be sure to use local tax professionals whenever you have IRS problems. Check the company’s website to verify that actual tax resolution professionals are employed, such as Enrolled Agents, CPAs, or tax attorneys in their firms. Most of the scam…
When we cannot agree with an IRS auditor, or come to a satisfactory conclusion in an audit, and have exhausted all hearings at the group manager level; then we will refuse to settle and will inform the auditor of our intent to appeal the case. We will then move the audit to the Office of Appeals. The appeals process is often needed because many IRS audits cannot be resolved with the auditor. Often the IRS auditor is newly trained and…
When we cannot agree with an IRS auditor, or come to a satisfactory conclusion in an audit, and have exhausted all hearings at the group manager level; then we will refuse to settle and will inform the auditor of our intent to appeal the case. We will then move the audit to the Office of Appeals. The appeals process is often needed because many IRS audits cannot be resolved with the auditor. Often the IRS auditor is newly trained and…
Did you know that you may be able to settle your debt with the IRS for a fraction of what you owe? The IRS Offer in Compromise program allows taxpayers to settle with the IRS on tax debt that has been incorrectly assessed or for liabilities they cannot afford to pay. The IRS Code states: "We will accept an Offer in Compromise when it is unlikely that we can collect the full amount owed and the amount you offer reasonably…
Liens Federal Tax Liens can really make your life miserable! When your taxes are not paid the IRS establishes a lien against all of your assets (especially real estate). This gives the IRS the legal right to collect taxes from the sale of your assets, which includes just about everything you own. The lien can be against you, your spouse, or your company. A lien against your company would seize your accounts receivables. At this point everything you own would…
As soon as you receive an IRS audit letter, you should contact us to arrange a meeting. We will explain what you should expect during the IRS audit process; from you receiving the Notice, all the way through the audit process, and to appeals, if needed. First we will need a copy of the audit notice to see what the issues are. Then we will need to prepare an IRS Power of Attorney Form and get you to sign it,…
