Tax Audit Help

The tax systems in the booming economies have a major role in the further progress of the economy. With an increased income, an individual is expected to have a high tax figure and at the same time greater probability of a tax audit. Picture this. The return you have filed is true to your knowledge but still you get a letter from the local taxman telling you of a potential tax audit. Whatever you do, just don’t panic. Often the most honest taxpayers are nerved by a tax audit and often make mistakes in their panicky. This could make even a genuine mistake look like a potential fraud. So, take the audit seriously but just don’t panic.
There may be various types of audits. Often the mode of communication gives a fair idea of the seriousness of the matter. Many audits made through mails are just an attempt to make the records complete. They may just ask you to provide various documents just for the sake of records. However, a personal audit in an office may be a serious case. A summon to “their” office or a court of law may see you in far greater trouble. Remember; never ask non-professional or unqualified people for help on tax audits. That may just increase your troubles.
Certain jobs are often targeted more for a tax audit than other jobs. A profession involving cash transactions (barbers or bartenders); professionals maintaining their own books (physicians, lawyers and accountants) and people claiming large deductions are often in far greater danger of a tax audit. If you are in one such category, be mentally prepared for an audit. Also, the best place to look for tax audit help are your books and return. Be sure of the income and deductions that you are claiming. Also, look for deductions that might be challenged. Keep proof enough to support any of your claims. Also, keep receipts of any charity or tax credit that you are claiming.
There is another point that one must remember. Always produce documents that are in question or that will help you in strengthening your claims. If you produce other unnecessary documents, you run a risk of a more serious audit. Also if someone helped you in filing you return, you may ask him to accompany you in the audit in order to help you in the tax audit. To check your confidence, the tax officers may tell you that accountants and tax attorneys are not allowed. Don’t be disturbed by this and tell them that you are ready for the audit but the accountant/attorney would help the audit make a quicker process as he also helped you in the return filing process.
Now, one may be curious to know about audits that happen after a few years. You should know that these audits are perfectly legal and may be trickier than an on-time audit. You may not be able to recall all the details and the records may not be readily available. For this specific reason, always keep a record of at least three years. Also, don’t be afraid to tell the taxman that you have forgotten the exact details and would require re-evaluation to help the tax audit process. Also, don’t let the audit officer keep your original documents ever as it may hamper any future audits and also weaken your case if you need to go in a court of law.
There may be some specific cases, wherein an audit is a trickier process and you may want to have legal help for the tax audit. Some of them include an office in the home, a payment/income towards alimony and medical-claim deductions. All of these are difficult to adjudge as expenses or compensations and thus, difficult to adjudge as part of taxable or non-taxable income. The only possible solution to this problem is that you consult the tax department itself. The tax departments provide help in filing returns and also, case studies of previous audits. You may also declare in the return itself that you are assuming something as a deduction and any audits would see you legally safe in that case.
The last thing to remember is that after an audit is complete, you are free to agree or disagree with the findings of the audit. If you agree, simply pay any amount that is due on you. You may also request the authorities to adjust the amount in your current return, so as not to overburden yourself with a heavy amount. However if you disagree with the report, you may appeal in a tax court that is independent of the audit officer and seek legal help against tax audit.
An audit is not that hard to go through. Just remember to be open, know about your rights and remember that you can always seek legal help against the tax audit.