Under federal and state laws, all citizens of the United States are required to pay taxes. The Internal Revenue Service (IRS) examines these taxes and may conclude that a Civil Tax Audit is required in specific cases. Tax audits are rarely pleasant experiences for taxpayers, and they frequently result in the need to pay additional taxes, penalties for underpayment, and, in some circumstances, criminal accusations.
Hiring an IRS tax audit lawyer can help you avoid unwarranted penalties and fines from IRS agents who are looking for grounds to charge you. When you are the subject of an IRS audit, you have the right to retain legal counsel to assist you in navigating this difficult process. For a variety of reasons, the IRS may be interested in your money, including:
Your reports stood out because you reported significant changes in your income and had business dealings with another person who was being audited.
Your audit may turn out to be a perfect success, with IRS inspectors finding that you filed your tax returns accurately. There will be no modifications, charges, or fines in that situation. However, the procedure is unpredictable, and having a tax audit attorney on your side increases your chances of getting a favorable result.
At Levy and Associates, our tax audit specialists have over 20 years of expertise representing clients during the audit process. Give us a call at 1-800-TAX-LEVY or fill out our contact form if you need help with a tax audit.
Financial Penalties and Criminal Charges May Result From Civil Tax Audits
When the IRS audits you or your company, it’s usually looking for instances where you didn’t pay the correct amount on your tax returns. The possibility of tax fines is a key motivator for people to give proper tax information each year.
Most people are required to pay a 20% accuracy-related penalty after an IRS tax audit. You must pay a 20 percent accuracy-related penalty on the amount you owe in unpaid taxes, as well as the outstanding amount and accompanying interest, if you owe this amount.
If you ignore IRS regulations, understate your income and amount due, understate the value of your assets, or pay your taxes late, you could suffer accuracy-related penalties.
You could face civil fraud fines in more serious circumstances. It is fraud if you knowingly present incorrect information on your taxes. If the IRS discovers strong evidence that you were aware of owing a higher amount in taxes but purposefully underpaid through deception, you may be charged with civil tax fraud.
The majority of audits conclude with costs and penalties that you can pay to clear your name. However, the IRS may charge you with a criminal in some circumstances. The following criminal charges may be related with your civil tax audit:
Lying on your tax returns, evading your taxes, not filing a return at all, and purposefully not paying your taxes are all examples of tax evasion.
If the IRS discovers that you have committed any of these offenses, it will report its findings to the US Department of Justice’s Tax Division.
Errors and Justifiable Cause
With the help of a tax consultant, you may be able to explain underpayment of taxes. If you uncover an error in your calculations or have a reasonable cause for the insufficient amount, we can assist you. For individuals who aren’t familiar with accounting, taxes are complicated and simple to misunderstand. Because of this complication, many people use accountants or other professionals to assist them in completing and filing their taxes.
To prosecute you with a penalty or a felony, the IRS must be able to prove that you misled on purpose. You are not guilty of a crime if you just jumbled up some numbers or misinterpreted a section of your taxes (but you will likely still be required to make up the difference).
The IRS will look at a variety of factors to see if you tried to pay your taxes appropriately but were unable to do so due to circumstances unrelated to fraud. In this case, the IRS will examine your education level, calculation errors, advice you received from tax professionals, and other third-party information.
If you believe the IRS conclusions are incorrect at the end of your audit, you can file an appeal. You can file an appeal using an IRS form or a letter of protest, depending on how much the IRS estimates you owe.
Your Right to Hire a Tax Attorney if You’re Facing an IRS Audit
If you come under IRS investigation for personal or business taxes, you have the right to hire a tax specialist or attorney to assist with your case. At Levy and Associates, we offer comprehensive tax services, including audit defense resources. Our talented team of tax specialists, CPAs, accountants, and attorneys has decades of experience to provide quality service.
If you receive a notice of an audit in the mail, you may naturally have concerns about being the subject of an investigation. Even if you have nothing to hide, hiring a tax attorney to protect your rights and help you through the audit process can bring you valuable peace of mind.
Our team at Levy and Associates can manage your audit and resolve it efficiently with the IRS. You shouldn’t feel as though you need to go through an IRS civil tax audit on your own.
Hiring professionals can take the fear and frustration out of being audited. If you’re under audit from the IRS, don’t hesitate to give us a call at 1-800-TAX-LEVY. You can also reach us through our contact form.
At Levy and Associates, we offer comprehensive services to meet your needs, no matter your tax situation.
