Tax Audit in Valley, Alabama
A "tax audit" in Alabama is the process by which the proper 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, typically 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 random audits, where they audit taxpayers at random, without necessarily suspecting them of any wrongdoing.
The procedure of being audited in Valley, Alabama is typically 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.
Once you have made sure that your audit is indeed real, you can do a few things to get ready for it. Most vitally, you should gather all of the documents that the auditor has asked for, as well as any additional documents and evidence that you think might help clear up any confusion about your tax return. You should bring these to the meeting with the auditor, and truthfully (to the best of your knowledge) answer all of the questions that the auditor asks.
Reasons For a Tax Audit in Valley, Alabama
There are several different reasons why the federal government, or the tax authorities of Alabama might decide that a tax audit is warranted in your case.
As mentioned earlier, you might get audited simply because you were chosen at random. If this is the case, and you know that your tax return was completely truthful, and have the documentation to back it up, you shouldn't have anything to worry about.
On the other hand, some taxpayers in Valley, Alabama are audited for a particular reason, rather than being drawn at random. If the tax authorities believe that you have underreported your income, that is a very recognized reason for a tax audit. For instance, if you claim on your tax return that you make $30,000 per year, and, in the same year, purchase an expensive luxury item, the tax authorities will wonder where you got that extra money, and why you're not paying taxes on it.
Likewise, trying to deduct a large percentage of your income is likely to raise suspicions. A tax deduction is a way to reduce one's tax liability by making some of one's income non-taxable. Some customary sources of tax deductions in Valley, Alabama are business expenses and charitable donations. Some people, however, try to include false deductions in their tax returns (trying to deduct charitable donations they never truly gave, for example). A massive number of deductions will be highly suspicious to the tax authorities, and they will want to see evidence to support every deduction you claim, if you're audited.
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How Can A Valley, Alabama Tax Lawyer Help?
If you are audited in Valley, Alabama, and believe that you have done everything right in collecting and filing your tax return, you probably don't have much to worry about. If there is anything wrong with your tax return, it was probably the result of an honest mistake, which will result in light penalties - typicallyy just an order to pay any back taxes you owe, plus interest.
However, there are some tax audits where the underlying facts are much more confusing than a simple misunderstanding. In these cases, a good tax attorney in Valley, Alabama may be necessary to ensure that the process is as painless as it can possibly be.