Subscribe Feed (RSS)You’ve just received the one notification everyone dreads: the Internal Revenue Service (IRS) has decided to audit your tax returns. Don’t panic: 1.4 million Americans were audited in 2009 with an even greater number expected to be audited this year and beyond. The federal government is operating with a record debt and the government wants to make sure your contributions are sufficient.
Get Prepared
While you shouldn’t panic, you should be prepared to act decisively. That means reading your IRS audit notice carefully and following the instructions precisely. You will have thirty days to respond which is plenty of time for you to get organized. Likely, you are being audited for one tax year only which means you should do the following:
Pull out your tax records. Yes, the IRS is auditing taxes for 2005 which seems like ages ago. You do keep records going back for many years, right? That’s good, because you’ll want to examine your return for that year and check all of your receipts. If records are missing or lost, get new copies ASAP.
Examine everything closely. Be prepared to explain everything on your tax return line by line. Put yourself in the shoes of your IRS auditor: does every deduction pass scrutiny? You may not recall why you took $13,000 in charitable deductions that year, but you will soon need to show proof of same. In the Jan. 15, 2004 issue of “USA Today,” Thomas A. Fogarty warned that taxpayers sometimes wildly inflate the value of donated property. Hunt down receipts to prove everything including the property’s value at the time it was donated.
Seek professional guidance. If you have an especially complicated tax return being audited, then call upon the services of a tax accountant for assistance. Use the same person who completed your return to help you; she may need to join you when you are audited. But be warned: in the Feb. 10, 2002 issue of the “Los Angeles Times,” Liz Pulliam Weston noted that when it comes to bringing along someone for the audit, “only enrolled agents, certified public accountants and tax attorneys are allowed to handle such matters.”
Bring copies, please. Expect that whatever documents you bring with you to your audit may end up being lost or misplaced. In any case, make copies of everything and only bring those copies with you. At the same time you should not bring along extraneous information; you want to stay organized and demonstrate to the auditor that you have a firm grasp of your finances.
Be confident. Know your rights before meeting with the IRS, confidently outlining your case as well. But don’t be cocky; you’re being audited and you need to be prepared to answer the auditor’s questions. Simple “yes” or “no” answers will usually suffice; talk too much and you may raise the auditor’s suspicions that you are hiding something.
The End
If the auditor proposes changes to your return and you accept them, then the audit is over. You may owe additional taxes and penalties, but audits are officially concluded once both parties come to an agreement. If you want to appeal the IRS’ decision, there are certain procedures you should follow as outlined in the IRS article, “The IRS (Examination) Process.”
Tags: federal government, Internal Revenue Service, IRS, IRS audit, tax accountant, tax attorney, tax audit, tax return
The Tax Man Cometh!
April 15th, 2009 by Matthew C. Keegan | 2 Comments | Filed in CommentaryIf you’re like millions of Americans, today isn’t one of your favorite days. In fact, April 15th is downright distressing for many taxpayers as federal and state income taxes are now due.
Everybody Should Pay Taxes
Do I think that everyone should pay taxes? Absolutely! Our great nation was founded with the idea that people should pursue their own happiness which is obtained in at least a small part by relying on themselves and working with each other, without expectation of government help.
Don’t get me wrong — I grudgingly accepted the fact that some government intervention in our lives especially in the form of social security and medicare is something that I can live with. Both programs are highly imperfect, but if they were managed properly they would provide what most older Americans need: a safety net. Unfortunately, each one is a money pit.
Your Vested Interest In America
Now back to my main point about why everyone should pay taxes: people who are looking for a vested interest (ownership) in their government (of the people) can truly only claim that interest if they contribute to the country by voting, paying taxes and through public service.
True, not everyone should join the military or work for the government — instead, community service is a much needed substitute as armies of volunteers have proven down through the ages. Legions of people have helped build, support and sustain local, state and federal governments through their selfless and tireless actions, work that has helped to make America great.
A One Page Form Would Do
I don’t have a plan on paper which outlines how shared taxation would work, but I know that it involves a whole lot less paperwork than what most people have to deal with. The Internal Revenue Service (IRS) is mandated to collect taxes on behalf of the U.S. Treasury, but each year their tax returns seem to get longer and more difficult to figure out.
Despite the help of Turbo Tax and other tax preparation software, Americans routinely spend days accumulating forms, checking their records and inputting data. Computers have made some of the work easier, but it still takes much too long to do what should be an easy process. I’m all for straight across the board taxation, using one page of data to collect tax information much like the 1040EZ which can now only be used by single tax filers and joint filers who don’t have dependents.
There has to be an easier and more equitable way to pay and collect taxes. Any suggestions?
Adv. — Do you love paying taxes? I don’t, but much like death I can accept paying them. Better than paying taxes to the government is spending money on things that you want including kitchen countertop appliances and cookware. For excellent savings, please visit MetroKitchen, Oneida or Pflatzgraff for the widest selection of goods online!
Tags: 1040EZ, federal government, federal taxes, Internal Revenue Service, IRS, state government, state taxes, taxation, taxes, Turbo Tax