Tax Audit in Anniston, Alabama
A "tax audit" in Alabama is the process by which the relevant tax authorities (either the IRS, at the federal level, or its state equivalent) investigate a tax filing in more detail than they do for ordinary filings, usually because there appears to be a discrepancy, or some other suspicious item, in somebody's tax returns. However, the IRS (and state tax authorities) sometimes do rounds of unexpected audits, where they audit taxpayers at random, without necessarily suspecting them of any wrongdoing.
The procedure of being audited in Anniston, Alabama is usually pretty simple. If and when the tax authorities decide to audit you, they'll send you a letter in the mail detailing what's about to happen. If you receive such a letter, it's extremely important that you make sure it's authentic. Sometimes, scam artists will send fake audit notices to people, claiming that they owe the government money. They will then collect their "taxes" and disappear. You should do an internet search for the name of the tax authority that the letter claims to represent, and call them to verify that you are being audited.
After confirming that the audit you're facing is actually legitimate, there are a few things you can do to prepare. Initially, you should assemble all of the relevant documents you have in your possession. This should include your tax return, W-2 forms, and records of any expenses that you claim as deductions. You should bring these documents, and any others that the auditor requests, to the meeting. At the meeting, the auditor will ask you a series of questions, which you should answer honestly and to the best of your knowledge.
Reasons For a Tax Audit in Anniston, Alabama
A tax audit in Alabama can be conducted for almost any reason at all
As considered earlier, an audit might happen due to a taxpayer being randomly selected. If this happens to you, and you have been honest on your tax returns, it's unlikely that you'll have much to worry about.
Nonetheless, some people in Anniston, Alabama are audited because the government suspects that they are underreporting their income. For instance, if you report that you only make $20,000 per year, and then go out and buy an expensive sports car, the IRS and state tax authorities are going to want to discover where the money to buy that car came from.
If you claim such a large number of deductions that your tax liability is unusually low, you may well be subject to an audit in Anniston, Alabama. A deduction is an allowable reduction in your taxable income, requiring you to pay taxes on a smaller portion of your income. Certain business expenses and charitable donations are common sources of tax deductions. However, some people add invalid deductions to their tax returns to reduce their tax burden. If the IRS is suspicious about your deductions, you should make sure you have proper documentation to back them up.
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If you find yourself being audited in Anniston, Alabama, and are sure that you have done everything right in preparing your taxes, then the audit will likely be over rapidly, with no penalties imposed. In cases like this, if anything is found to be wrong with your tax return, it is likely the result of an honest mistake, and the auditor will be aware of this, and will likely give you an opportunity to correct your mistake, without suffering any penalties, with the possible exception of being made to pay interest on any back taxes you owe.
However, there are times when an audit is conducted to investigate far more significant issues. If you find yourself facing allegations from the IRS of serious wrongdoing, and believe yourself to be innocent, you should seek the advice of a Anniston, Alabama tax attorney immediately.