Category: Individual Tax Planning, Business Tax Planning
Posted: September 2018
The IRS will audit hundreds of thousands of individual tax returns this year. Although that represents a small percentage of all returns filed, this is little consolation if YOUR return is selected for audit. But, with proper planning and preparation, you should fare well.
The purpose of the audit is to verify items reported on a tax return. The easiest way to survive a tax audit is to prepare for one in advance. On an ongoing basis you should systematically maintain documentation—invoices, bills, cancelled checks, receipts, or other proof—for all items to be reported on your tax return. Keep all your records in one place and hold on to your calculations.
The government normally has three years within which to conduct an audit, and often the audit won't begin until a year or more after you file your return.
The scope of an audit depends on the complexity of the return being examined. A tax return with business or real estate income and expenses is likely to take longer to audit than a return reflecting only salary income.
Even if you prepared your own return, it is often advisable to have a tax professional represent you at an audit. Your representative knows what issues the IRS agent is likely to focus on and can prepare accordingly.
If you're facing a tax audit or simply want to improve your record keeping, our staff are ready to assist you. Please call to set up an appointment to discuss this or any other aspect of your taxes.
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