Simply put, if the IRS suspects that your tax return contains an error, your financial records may be subject to examination. However, you are not necessarily under investigation for a tax crime.
Understanding Your Rights During an Audit
If you receive a notice that your tax return will be audited, you have certain legal rights during the examination process. While your financial records are being audited, you have the right to professional and courteous treatment by all IRS employees. You also have the right to privacy and confidentiality; the IRS cannot share information regarding your audit with others.
When the IRS asks you to relinquish information regarding your tax return or your financial records, you have the right to know why they need the information and the consequence if you decide not to comply. Additionally, you have the right to hire professional legal representation.
With a high-quality attorney on your side, you can have peace of mind that your case is in dedicated and reliable hands. If you have been audited and believe that the IRS has infringed upon you legal rights, talk to a skilled Las Vegas criminal defense lawyer at Okabe & Haushalter.
Why were my records chosen for examination
The IRS may choose to audit your financial records for a variety of reasons. For instance, if the IRS decides that information on your tax return is outside of the norm, it may decide to audit your return. Just because you’ve been audited doesn’t mean that the RIS necessarily suspects that you’ve committed a tax crime; the audit process is a safeguard used to guarantee that your return is correct. Your return may also be selected for audit through random computer screening.
In other words, if a computer determines that statistically speaking your tax return is more likely to contain an error, you will be audited. The IRS may decide to audit your return using document matching. For example, if your tax return and your W-2 indicate different incomes, the IRS may decide to investigate. You may also be audited because of your association with someone else. For example, if your business partner’s records are being examined, yours may be examined too.
What To Do After the Audit
Audit length depends heavily on the type of examination. Thus, it may be difficult for the IRS to know how long the examination will take. Additionally, the length of your examination may vary depending on your availability and the availability of the information requested by the IRS. Once the IRS has examined all of the relevant documents and information related to your tax return, it will make a determination regarding your case. There are three possible outcomes:
- The IRS finds no error in your return
- The IRS finds an error, suggests changes and you comply
- The IRS finds and error, suggests changes and you disagree
If you agree with the changes suggested by the IRS, you will be asked to sign an examination report indicating your compliance. If not, you have the right to appeal the IRS determination. This may be done in a variety of ways. First, you may file a petition in Tax Court. If you want to avoid court, you may pursue dispute mediation or another alternative dispute resolution.
We at Okabe & Haushalter Can Help
At Okabe & Haushalter, we understand that the tax audit process may be confusing—even intimidating. Make sure that your rights are upheld and respected during the audit process by hiring a top-notch defense attorney from our firm. With a high-quality lawyer fighting for you, you can have peace of mind that your case is in reliable and experienced hands.
The Auditing Process: Know Your Rights
According to the IRS, you have specific rights during the auditing process. To make sure none of your rights are violated, talk to a lawyer. You are entitled to fair, professional, and courteous treatment by all IRS employees while your tax return is audited. If you are treated rudely, your attorney can help. You have the right to know why you have been audited. The IRS cannot audit your financial records without telling you why they are being examined. When the IRS requests information from you, it is required to tell the consequences if you fail to comply.
During the auditing process, you have the right to legal representation; you don’t have to face the IRS alone. Once you are notified (by mail or by phone), contact your attorney as soon as possible. The auditing process can be intimidating and overwhelming—that is why the lawyers at Okabe & Haushalter are dedicated to helping people like you stand up for their rights in the face of an examination. Finally, you have the right to appeal any decision made by the IRS that you don’t agree with. If you decide to contest the IRS’s determination about your tax return, you may take your cases to Tax Court or pursue an alternative dispute resolution.
Audit Determinations
There are three possible determinations the IRS can make at the end of your audit:
- Your tax return did not contain any errors
- Your records contained errors, the IRS proposed changes and you agree with them
- Your records contained an error, the IRs proposed changes and you disagree with them
If you agree with the determination of the IRS, you will be asked to sign an examination report indicating your compliance. If not, talk to your attorney about settling your tax controversy in Tax Court. Additionally, the IRS is open to certain forms of alternative dispute resolution.
How long will the examination process take
The length of your audit is determined by the type of examination and the nature of documents to be examined. Some documents are significantly more complex than others and take more time to review. Additionally, if the information required by the IRS is not readily available, the auditing process may take more time. If you disagree with the findings or determinations of the IRS regarding your financial records or tax return, your audit may tax more time than expected.