IRS Tax Audit is related to the official review of the Internal Revenue Service of the company to check the tax supporting documents and what is the individual or business’s tax return. Although a small group of businesses or individuals are audited, the odds are always there that you can get audited by IRS tax auditors. However, if the IRS Tax audit happens, a few companies may not understand the complexities of the U.S. Tax Code. In this situation, getting help from the right tax attorneys can save your day. You may or may not get a notice for C-Corp Audits, but if you have received it, do reach out to silvertaxgroup.com/c-corp-audits Tax Attorney.
What Are Triggers Of IRS Tax Audit?
Let us first quickly discuss the IRS audit trigger points, and then read on to find out how you can deal with that.
- Incomplete Information: The information in your State and Federal tax forms must match. The reason being the state and the IRS agencies do share the information regarding the business’s tax returns. A simple mistake or a deliberate mistake can land you in a soup.
- Unreported Income: While carrying out IRS Tax Audit, IRS receives copies of 1099s and W-2s. The IRS auditors compare the data on your forms and the amount reported on the tax return. If you receive 1099, which isn’t yours, return it and file the correct report to the IRS.
- Giving Large Charitable Gifts: A common audit trigger comes your way when large charitable gifts and item deductions are done under Schedule A. The trigger follows if your income is low but the donations made are higher. The non-cash donations need written acknowledgment if the value exceeds $250.
- Running A Cash Heavy Business: A cash-heavy business means when your company is making a lot of cash, you are much more likely to get audited. Many cash-making business owners do not report their heavy income, but if it comes in the eyes of the IRS, you are bound to get audited. Beauty salons, restaurants, convenience stores, car washers, and laundromats particularly fall in this group.
- Cryptocurrency Transactions: IRS is taking crypto transactions seriously too. The number one question on this year’s Form 1040 is that if you have received, traded, sold, or disposed of any financial transactions in the form of cryptocurrency, you are liable to pay taxes. The number of business owners or individuals reporting crypto income is quite low. So, an underreporting can land you in the tax audit bracket.
How to Deal with IRS Tax Audit?
The IRS trigger points may attract a strong audit on your end. So, if you are unaware of the C-Corp Audits or the red flags that can land you in problems, it is advisable to reach out to the tax attorney. They will help you know the whole process, create an error-free tax report, and deposit the requisite documents in the IRS office.
Conclusion
IRS Tax Audit can happen at any moment. But resolving the situation at the right time can help your business avoid any trouble. Moreover, businesses must hire a reputed and professional tax attorney to help them with taxes and related laws.
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