Do know someone who has received a notice from the Internal Revenue Service (IRS) about an impending audit? Have you been so unfortunate as to receive one? If so, you may be wondering how the IRS decides which tax returns to audit. Is it random? Is there a complicated algorithm they use to decide? Or, are there certain red flags that IRS agents look for when they process tax returns?
As a citizen of the United States, you need to learn as much as you can about the tax system. While it's complicated, knowing the basics will go a long way in keeping you out of trouble.
If you are starting a nonprofit corporation, there will be many details that require your attention. Many of these are related to your financial and tax situations, so it's important to get on the right page from the start.
There is only one thing worse than receiving notice of a tax audit: receiving notice when you have reason to believe that you may have done something wrong.
It doesn't matter if you complete and file your own income tax return or hire a professional to assist you, there is always the chance that you will make a mistake.
Winning the lottery can be an amazing stroke of luck. You can pay off your debts and indulge yourself and your loved ones. Unfortunately for some people, winning the lottery can result in tax issues. If you have won a lottery prize, that income is subject to federal, state and local income taxes.
Mistakes happen. When you're talking about filling out complicated and confusing federal tax forms, it's easy for people who do their own taxes to make mistakes. Maybe you forgot to list your international bank accounts. Maybe you changed jobs and forgot about the W-2 from your former employer. It's even possible that a glitch in the tax preparation software you use could cause you legal and financial issues.
No matter how hard you try to avoid an income tax audit, one could come into play at some point. In short, this means the IRS wants to learn more about your tax filing to make sure the information you provided is accurate.
As a United States citizen, it's always a good idea to have a strong grasp of the tax system. In addition to federal taxes, you should know where you stand with regard to state and local taxes.
You filed your taxes, and you honestly tried to do them correctly, but you're worried. What are the odds you're going to get audited? Did you make any mistakes that could trigger an audit, even if you made them honestly? Is the IRS going to come calling sooner rather than later?